Market collapse threatens: Does Trump's customs policy lead to US recession?

Market collapse threatens: Does Trump's customs policy lead to US recession?

On April 7, 2025, the international markets recorded another drastic decline, which was triggered by President Donald Trump's aggressive customs policy. After an already severe decline on Thursday, there were significant losses on the US exchanges on Monday, with the Dow Jones fell by 3.8 percent to 3,669.18 points. The S&P 500 also lost 3.95 percent and closed at 4,873.49 points, while the Nasdaq Composite decreased by 4.21 percent to 14,931.36 points. The losses were also significant at the European stock markets; The Euro Stoxx-50 fell 4.93 percent to 4,637.96 points, which has been the lowest level since August.

These developments are part of a broader relationship between trade wars and the global economy. Economists now estimate the likelihood of a US recession to 60 percent, compared to 40 percent before the new customs plans. Goldman Sachs has even increased this assessment to 45 percent. The decline in the markets is not only limited to the US economy. The DAX in Frankfurt also recorded a decline of 4.68 percent to 19,676.48 points and the London FTSE 100 fell 4.68 percent to 7,678.04 points. The Austrian ATX dropped 4.47 percent to 3,594.50 points, the lowest level since the end of December.

trade wars and their global effects

The tensions between large trading partners such as the USA and China lead to considerable uncertainty in the international markets. Trade wars arise from tariffs and trade restrictions, which are often enacted to promote domestic production. These conflicts have the potential to cause economic damage at a global level. Companies come under pressure through higher import duties, which increases their production costs and reduces competitiveness. Consumers, on the other hand, are faced with higher prices for imported goods, which ultimately reduces their purchasing power. Long -term trade relationships can also be impaired, which could burden global trade.

The consequences of the current trade conflicts are already noticeable. China predicts growth of -0.5 percent, while Germany expect -0.3 percent and the United States expect -0.2 percent. The situation is particularly worrying for developing countries that depend heavily on international trade. There is a need for governments and international organizations to take measures to prevent trade wars. Bilateral discussions to clarify the concerns and the diversification of the trading partners are recommended as possible strategies to reduce trade conflicts.

President Trump is meanwhile as a proponent of his customs policy and reports on trade offers from other countries, although the economic effects are becoming increasingly serious. The uncertainties and instabilities that result from the trade wars not only endanger economic growth, but could also cause long -term damage.

Overall, the situation in international markets remains tense, and the perspectives for global economic stability are increasingly at risk from the progressive trade conflicts. Experts advise companies to diversify their supply chains and invest in research as well as development in order to protect their competitive advantages.

Further information on the effects of trade wars can be found at Krone and nadr .