Daijiworld Media Network - Washington

Washington, Apr 5: US stock markets plunged into chaos for the second consecutive day, grappling with the fallout from President Donald Trump’s sweeping reciprocal tariff announcement. Friday saw one of the worst market crashes since the COVID-19 outbreak, stoking fears of a looming global recession.

The Dow Jones Industrial Average plummeted by 5.5%, while the S&P 500 dropped a staggering 5.97%, wiping an estimated $6 trillion from the markets, according to AFP. The losses, affecting millions of American investors and retirees, have sent shockwaves through financial sectors worldwide.

The tariffs, introduced on April 2 and branded by Trump as “Liberation Day Tariffs,” include a baseline 10% levy on all imports, with steep, country-specific surcharges—25% on South Korea, 24% on Japan, and 34% on China. China, in retaliation, slapped a 34% duty on US goods, effective April 10, and imposed restrictions on the export of rare earth elements crucial to the American tech and medical sectors.

Despite the alarming market plunge, Trump remained defiant. In an all-caps post on his social media platform Truth Social, he declared it a “great time to get rich—richer than ever before” and insisted his policies “will never change.”

“Big business is not worried about the Tariffs, because they know they are here to stay,” Trump wrote. “They are focused on the BIG, BEAUTIFUL DEAL, which will SUPERCHARGE our Economy.”
However, financial analysts and economists warn otherwise. China’s restriction on rare-earth exports—elements like samarium, gadolinium, and dysprosium—threatens to cripple key US industries. From 2020 to 2023, 70% of US rare earth imports came from China, according to the US Geological Survey.

With markets reeling and global supply chains under strain, economists warn the situation could push the world economy toward recession. The International Monetary Fund defines a recession as two consecutive quarters of decline in a nation’s real GDP—a scenario that now seems increasingly possible amid mounting trade tensions.

As tensions escalate, China has also indicated plans to sue the United States at the World Trade Organization (WTO), pushing the standoff into the global legal arena.

While Trump insists the tariffs will revive domestic manufacturing and create jobs, critics argue the immediate consequences are proving far more destabilizing—economically and diplomatically—than anticipated.