The US president has said foreign governments will have to pay “a lot of money” to lift tariffs that he characterised as “medicine” as markets in Asia plunged in early trading on Monday, continuing a two-day sell off that wiped almost $5tn off the value of global stock markets last week.
Trump indicated he was not concerned about the market losses, telling reporters late on Sunday: “I don’t want anything to go down. But sometimes you have to take medicine to fix something.”
The UK stock market has plunged deep into the red at the start of trading.
Stocks are sliding sharply again, adding to last week’s heavy losses, as investors grow more fearful that Donald Trump’s trade policies will lead to recession.
In London, the FTSE 100 index of blue-chip stocks has plunged by 488 points, or 6%, taking the index down to 7566 points, its lowest level since February 2024.
That’s an even more severe plunge than the near-5% wipeout on Friday after China retaliated against the US with its own new tariffs.
Every share on the FTSE 100 is in the red, with UK manufacturing firm Rolls-Royce tumbling by 13%.
Miners, banks, and investment firms are also in the top fallers.
There is widespread disappointment this morning that there was no progress on US trade tariffs over the weekend, with Trump described his new tariffs as necessary ‘medicine’.
Kathleen Brooks, research director at XTB, says investors are desperate to see "concrete action", such as a pause or U-turn on Trump’s tariffs: "This market is looking for concrete action, not talk of action. The best panacea for financial markets right now would be a pause or reversal from the US on its tariff programme."
Here is a summary of other overnight developments:
• Japan’s benchmark Nikkei 225 index tumbled nearly 9% as concerns over a tariff-induced global recession continued to rip through markets on Monday, reaching 30,792.74 for the first time since October 2023. Prime minister Shigeru Ishiba said his government would continue to ask Trump to lower tariffs but that results “won’t come overnight”.
• Hong Kong and Chinese stocks dived, with Hong Kong’s Hang Seng index down 8% in early trade. Shares in Chinese tech giants Alibaba and Tencent fell more than 8%.
• Taiwan’s stock exchange fell almost 10% on the Monday open, the first day of trading since the tariffs were announced. The drop marked the largest one-day point and percentage loss on record, according to local media.
• Trading on South Korea’s Kospi index was halted for five minutes as stocks plummeted.
• Australian shares were also sharply lower, with more than $160bn wiped off the markets in early trading.
• The US president said he had spoken to leaders from Europe and Asia over the weekend, who hope to convince him to lower tariffs that are as high as 50% and due to take effect this week. “They are coming to the table. They want to talk but there’s no talk unless they pay us a lot of money on a yearly basis,” Trump said.
• Trump’s tariff announcement last week jolted economies around the world, triggering retaliatory levies from China. Wall Street stock futures opened sharply lower on Sunday, in a sign of further turbulence after the worst week for US stocks since the onset of the Covid-19 crisis five years ago.
• Treasury secretary Scott Bessent said more than 50 nations had started negotiations with the US since last Wednesday’s tariffs announcement.
• Wall Street is also on track for another rout. Ipek Ozkardeskaya, senior analyst at Swissquote Bank, has the details: "Wherever we look this morning, it’s a bloodbath. The S&P500 is down by almost 4% at the time of writing, Nasdaq futures are down by more than 4%, same for the European futures and the week hasn’t even started yet."
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Trump’s tariffs may be perilous for small, heavily indebted countries in global south 
