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Stock markets across Europe and Asia plunged on Monday as fears over the global impact of US President Donald Trump’s trade tariffs deepened.<\/p>\n
The FTSE 100 opened more than 5% lower, following its steepest fall in five years<\/a> on Friday.<\/p>\n Germany’s Dax plummeted 10% in the first few minutes of trading, before recovering ground, after Asian markets dropped steeply overnight, with Hong Kong’s Hang Seng experiencing its fourth-biggest one-day decline ever.<\/p>\n US markets were also set to open lower as economists warned that a recession in the country is now looking increasingly likely. <\/p>\n<\/div>\n On Thursday, Trump announced tariffs on the US’s trading partners<\/a>, many of which were steeper than economists had expected. <\/p>\n As traders digested the news, US markets experienced their worst week since the beginning of the Covid pandemic in 2020, with more than $5 trillion (\u00a33.9tn) erased from the S&P 500.<\/p>\n Economists speculated that may countries would attempt to negotiate deals on the tariffs.<\/p>\n But on Sunday night Trump doubled down, telling reporters<\/a> that “sometimes you have to take medicine to fix something”. <\/p>\n<\/div>\n If world leaders are unable to negotiate deals with Trump, the tariffs may have a destructive effect on economies globally, analysts have warned.<\/p>\n “Fundamentally, investors are worried about a big hit to corporate earnings and a massive slowdown in economic growth,” said Russ Mould, investment director at AJ Bell. <\/p>\n On Monday, economists at US banking giant Goldman Sachs predicted a 45% chance of a recession in the US if Trump does not negotiate deals on the tariffs. <\/p>\n That came after JP Morgan, another US bank, said it saw a 60% chance of recession in the country.<\/p>\n The tariffs could lead to a 0.8% fall in the UK’s GDP growth in 2025, added economists at KPMG. <\/p>\n “There is a strong incentive to seek a negotiated settlement that diminishes the need for tariffs,” said Yael Selfin, KPMG’s chief economist.<\/p>\n Meanwhile, worries about a trade war between the US and China sent the price of Brent crude oil down more than 4%, following a fall of more than 10% last week.<\/p>\n