On April 7, 2025, Asian markets were rocked by a significant economic shock following new tariffs imposed by U.S. President Donald Trump. The Tokyo Stock Exchange opened with a dramatic decline, with the Nikkei index plummeting by over 8%, marking its lowest point in the past eight months. The broader Topix index also experienced a significant loss, dropping more than 7.5% in value.
This economic upheaval quickly spread to other major Asian markets. In South Korea, the Kospi index fell nearly 5%, prompting a temporary suspension of trading to prevent investor panic. Taiwan's Taiex index suffered an even steeper decline, falling by almost 10%. Additionally, stock exchanges in Australia and New Zealand registered losses of over 6% and 3.5%, respectively.
These massive declines are a direct consequence of the escalating global tariff war initiated by Trump, who recently enforced a sweeping 24% tariff on imports from Japan. This tariff is set to take effect during the week of April 7, 2025. Japanese authorities have acknowledged the impending painful effects, particularly in the automotive and technology sectors. Japanese Prime Minister Shigeru Ishiba stated, "The government will take all possible measures to protect the economy and jobs."
Investor reactions on a global scale have been overwhelmingly negative. Last week, U.S. stock exchanges lost an astounding $5.4 trillion in market value over just two days, the largest drop in the past five years. On the evening of April 6, futures contracts for American stocks indicated a continuation of this downward trend.
Compounding these economic concerns, China announced a retaliatory tariff of 34% on all American goods on April 4, 2025, signaling a serious escalation in the trade war. Economic analysts warn that this cycle of tariffs between the world's major economies could not only lead to a global recession but also create long-term trade imbalances.
The implications of these developments extend beyond mere economics; they also carry significant geopolitical weight. Each tariff decision has the potential to reignite old tensions and destabilize an already fragile international trading system. The responses of the U.S., China, and their allies in the coming days will determine whether the world is heading toward a temporary correction or a major economic crisis.
As the economic shockwaves reverberate through global markets, the cryptocurrency sector is also feeling the impact. On the same day, cryptocurrencies faced a strong sell-off at the opening of Asian markets, as reported by CNBC. Edul Patel, co-founder and CEO of Mudrex, noted that the widespread selling in global markets has adversely affected cryptocurrencies, which had previously been praised by Trump, who even launched his own virtual currency.
Data from Coinglass revealed that approximately $745 million worth of crypto bets were sold in the last 24 hours, the highest figure in nearly six weeks. According to CoinSwitch Markets Desk, investor sentiment remains cautious regarding the economic implications of the newly imposed tariffs. The significant drop in cryptocurrency values indicates a clear risk-off sentiment in the markets.
Bitcoin, the largest cryptocurrency by market capitalization, crashed by 7% to $77,077 at the opening of markets in Singapore on April 7. Ethereum, the second-largest cryptocurrency, also saw a sharp decline, hitting its lowest intraday level since October 2023, at $1,538.
Avinash Shekhar, co-founder and CEO of Pi42, remarked, "The sudden plunge of Bitcoin below the $80,000 threshold and the overall sell-off in the crypto market, which wiped out more than $160 billion in value, is a pivot point fueled by macroeconomic uncertainty and investor wariness." He added that as Wall Street futures declined and fears of a repeat of the "Black Monday" emerged, the correlation between traditional markets and crypto holdings became more evident.
The overall capitalization of global crypto markets on April 7 stood at $2.5 trillion, reflecting a decrease of 6.59% in the past 24 hours. The volume of all stablecoins reached $95.57 billion, constituting 93.84% of the total 24-hour volume of the crypto market. Other cryptocurrencies also felt the sting of the market downturn; Ethereum was priced at $1,590.06, down 12.10% from the previous day, while Solana was trading at $106.53, down 11.44% in the last 24 hours, with a market capitalization of $54.91 billion and transaction volumes of $4.25 billion.
As the global markets navigate this critical juncture, the decisions made in the coming days will have profound implications for the world economy. The stakes are not just economic; they are geopolitical, as each tariff decision risks reigniting old tensions and destabilizing an already fragile international trading system.
