April 7, 2025 — Asian markets plunged today in what analysts are calling a “bloodbath,” as investors reacted sharply to renewed tariff threats from former U.S. President Donald Trump. Trump’s announcement of sweeping new tariffs on Chinese goods, should he win re-election, sparked a major selloff across the region.
Major indexes across Asia tumbled. Japan’s Nikkei 225 fell 3.7%, Hong Kong’s Hang Seng dropped 4.5%, and China’s Shanghai Composite slid 3.2%. The MSCI Asia ex-Japan index was down nearly 4% in early trading, marking one of its worst sessions in recent years.
Trump’s latest comments, made during a campaign rally over the weekend, called for a 60% tariff on all Chinese imports, reigniting fears of a full-scale trade war. Investors worry that aggressive U.S. trade policies would disrupt global supply chains, dampen economic growth, and further strain already fragile economies in Asia.
“The markets are pricing in the risk of a very hostile U.S.-China trade environment,” said Emily Tan, chief market strategist at Apex Investments. “A return to aggressive tariffs could derail Asia’s export-driven recovery.”
Currency markets were also rattled. The Chinese yuan weakened against the U.S. dollar, while the Japanese yen briefly strengthened as investors sought safe-haven assets. Meanwhile, shares of export-dependent companies, especially in technology and manufacturing sectors, suffered steep losses.
Analysts warn that heightened uncertainty could continue to pressure Asian markets in the coming weeks, especially as the U.S. election campaign intensifies.
“With Trump leading in key battleground polls, markets are starting to hedge against a potential second trade war,” said Vincent Chow, senior economist at Pacific Wealth Advisors. “The risk premium is back.”
Global investors are now awaiting further clarity on U.S. policy directions and any potential response from Beijing. Until then, market volatility is expected to remain high.