Global Stock Markets Plunge After Trump’s Tariff Shock

After Trump’s tariffs offensive: Stock markets collapse worldwide

Stock Markets prices are plummeting worldwide – including in the US, despite the White House’s promise of a “golden age.” Adidas and Puma are suffering the most.

Stock Markets prices plummeted worldwide on Thursday following US President Donald Trump ‘s tariff offensive . The German stock index (DAX) closed down 3.1 percent. The Japanese Nikkei index had already plummeted 2.8 percent. Financial markets expect that the punitive tariffs announced by Trump on US imports from almost all countries will massively damage the global economy and depress corporate profits.

Significantly, the losses also extend to the US Stock Markets. On Wall Street, the key stock index, the S&P 500, was down almost five percent in the late afternoon, and the Nasdaq technology exchange was down more than five percent. Apple (down 10.7 percent) and Nvidia (down 8.2 percent) were particularly hard hit. Tesla shares also fell by more than five percent.

Financial markets assume: Stock Markets

Financial markets assume that the trade war instigated by Trump will also harm US companies – contrary to a White House spokeswoman who said they were in the process of “restoring America’s golden age.” Bundesbank President Joachim Nagel said: “Overall, this is an economic policy mix that will see many losers, particularly in the USA .” He called on the US government to keep the door open for talks.

Economists warned of significant damage to the German economy. “Europe, and especially Germany, with its strong exports, are also affected by these tariffs,” said Achim Wambach, President of the Leibniz Centre for European Economic Research (ZEW). Studies predict that exports from Germany to the US are likely to collapse by around 20 percent. “Gross domestic product will decline by up to 0.5 percent,” Wambach said.

For Bundesbank President Nagel, Trump’s tariffs are endangering global economic stability. They are setting the global economy on the wrong course, “because the prosperity of everyone is being attacked,” Nagel said. Global economic growth will decline, and prices will rise. “Overall, the degree of uncertainty among economic actors will increase.” From the Bundesbank President’s perspective, this is not a good environment for developments in the financial markets.

Stock Markets: “A bitter day for the global economy”

The Munich-based Ifo Institute called it a “bitter day for the global economy.” Trade expert Lisandra Flach said: “What we have seen has nothing to do with reciprocity. The tariff difference between the US and the EU averages only 0.5 percentage points – compared to the announced tariff increase of 20 percent.” The planned tariff increase marks “a turning point for the global economy and thus endangers almost 80 years of multilateralism,” Flach said. For the German economy, she expects “initially a permanent decline in gross domestic product of 0.3 percent” as a consequence, with some key sectors such as pharmaceuticals, automotive, and mechanical engineering being more severely affected.

In the DAX, sportswear manufacturer Adidas recorded the largest losses by mid-afternoon, with a drop of 9.3 percent. This was followed by Siemens (down 6.7 percent), Deutsche Bank (down 6.5 percent), and Deutsche Post, Infineon, and Commerzbank, each with losses of around four percent. Automobile manufacturers BMW, Mercedes, and VW suffered losses of two to three percent. Their share prices had already fallen sharply in recent weeks because they were most directly affected by the punitive tariffs.

Reason: “Sportswear brands will be disproportionately affected”

In addition to Adidas, sportswear manufacturers Puma and Nike were also the day’s big losers. Puma’s share price fell by 11.4 percent at one point, while that of US manufacturer Nike fell by 7.8 percent. The reason: “Sportswear brands will be disproportionately affected by the higher tariffs on Vietnam,” said analyst Cédric Rossi of the investment bank Bryan Garnier.

Trump imposed a tariff of 46 percent on Vietnam, 49 percent on Cambodia, 37 percent on Bangladesh, and 32 percent on Indonesia. Nike produced half of its footwear and 28 percent of its apparel in Vietnam in 2024, while Adidas produced 39 percent of its footwear and 18 percent of its apparel. Indonesia and Cambodia are also important production locations for Adidas.

German trade is suffering in three ways

But the sporting goods companies are just the tip of the iceberg. “German trade is suffering in three ways: first, because Germany is exporting less to the US. Second, because Germany is exporting less to China due to China’s lower competitiveness,” said Ifo expert Flach. “And third, because of increased competition in Germany, for example, when China looks for new markets to sell the products previously exported to the US.”

The extent to which the tariffs are damaging the US is also reflected in the dollar exchange rate: The euro rose by 1.7 percent on Thursday to 1.1091 US dollars. Just a few weeks ago, the exchange rate was still at 1.03 dollars. This means that the US currency has already lost a good seven percent. “The new tariff policy will weaken the US dollar exchange rate,” says Jan Viebig of Bank Oddo BHF. This would result in exchange rate losses for foreign investors who invest in US stocks or bonds. A weaker dollar also puts Trump at risk from financing the US budget deficit by foreign investors.

Joachim Schallmayer of Deka Bank expects “a medium-sized earthquake” if the tariffs are implemented as announced. Countermeasures are likely and will dominate the news in the coming days. “This will further contribute to the uncertainty. Prices will therefore be hard to settle in the coming days,” the expert said. The damage will be felt primarily on the US stock market. While European stock markets could also come under pressure in the short term, the long-term upward trend remains unbroken.

“Liberation Day” causes falling prices: Tariffs against Vietnam and Co. hit Adidas, Nike and Puma hard

The tariffs announced by the USA against numerous countries are causing falling prices, especially for sporting goods manufacturers.

Sneakers and hoodies are likely to become significantly more expensive in the US due to high tariffs against Asian countries like Vietnam and Cambodia. The world’s largest sporting goods companies Nike, Adidas and Puma. They have more than 90 percent of their shoes and sportswear manufactured there and can hardly switch to alternative locations at short notice. There is no significant production in either the US or Europe.

The tariffs could squeeze margins across the entire industry by more than ten percentage points, said Metzler analyst Felix Dennl on Thursday, one day after the drastic tariff package announced by US President Donald Trump. Consumers in the US are also likely to spend less on textiles. “Sporting goods manufacturers will likely respond with price increases in the US.”

According to UBS calculations Prices

According to UBS calculations Prices would have to be increased by ten to twelve percent due to the tariffs against Vietnam alone. This put massive pressure on stocks across the entire industry: Adidas plummeted ten percent to €198.95, falling below the €200 mark for the first time in almost a year. Puma’s battered stock fell eleven percent to €20.28, its lowest level in almost nine years. Nike fell 12.7 percent in Frankfurt and, at 52 euros, were at their lowest level since the end of 2017.

Adidas and Puma initially declined to comment on the new tariffs. Both generated almost a quarter of their revenue in North America in 2024. The subcontinent accounted for 11 percent of Adidas’ operating profit, and 23 percent for Puma. Both have smaller market shares in the US than the top dog and global market leader Nike, which is struggling not only with the weak economy but primarily with domestic problems.

At Adidas, sales in North America increased by more than ten percent in the fourth quarter of 2024, and the Herzogenaurach-based company had previously expected double-digit growth rates there for the current year as well. Puma CEO Arne Freundt had even specifically targeted the US as a growth area because the global number three has so far been too heavily involved in the low-cost segment for his liking.

In recent years: sporting goods industry

In recent years, the sporting goods industry has increasingly turned to other countries in Asia due to tensions between the US and China. Nike sources half of its shoes and 28 percent of its textiles from Vietnam; Adidas sources 39 percent of its shoes and 18 percent of its clothing.

Only Puma still sources China at 28 percent, ahead of Vietnam at 26 percent. Tariffs of 46 percent on goods from Vietnam are hitting them even harder. US President Trump even imposed a tariff of 49 percent on Cambodia, and the tariffs on China are rising by 34 percentage points to 54 percent. Indonesia, where Adidas now has almost a third of its shoes produced, is subject to a rate of 32 percent.

Textiles and fabrics accounted for around $15 billion, or ten percent of Vietnam’s total exports to the United States last year. “It appears as if the tariffs are intended to specifically target the apparel industry,” wrote analyst Dylan Carden of William Blair in Chicago. The average US tariff rate on textiles would thus rise to 30.6 percent from 14.5 percent, according to Professor Sheng Lu of the University of Delaware.

“Europe’s biggest economic nightmare” – Dax loses massively

The mood on the stock market quickly turned negative on Thursday. The DAX fell to its lowest level in over two months at the end of trading – all because of one man.

The new tariffs announced by US President Donald Trumphit the German financial markets hard. The DAX lost three percent in trading on Thursday, closing at 21,717 points. After a brief recovery in the morning, the stock market index extended its losses again as Wall Street opened.

This puts the German benchmark index well below the 22,000 mark, where buying interest was recently observed. Thursday’s closing level is the lowest in almost two months.

Any attempts at recovery in the DAX quickly fizzled out, said Jochen Stanzl of CMC Markets. “The buyers are gone, and if prices recover a bit, investors will be ready to exit the market and take profits.” Stanzl calls it a “toxic mix” and recognizes “a 180-degree turnaround in stock market sentiment.”

The new tariffs will make “Europe’s biggest economic nightmare” come true, write economists at the major bank ING While the European Defense Initiative and the German debt package had significantly improved the longer-term outlook, the tariffs wiped out the short-term outlook.

Dax suffers from tariff war – What does the US Federal Reserve chairman say?

US President Donald Trump’s drastic tariff package sent shockwaves through the markets on Thursday. The 
DAX lost heavily, and the EuroStoxx50 also slumped. “Trump is playing high, the stock markets are falling,” summarized Jochen Stanzl of CMC Markets. QC Partners analyst Thomas Altmann believes the US president is “moving the global economy closer to the brink.” This approach will cost growth worldwide, and many countries could slide into recession.

The tariff war sparked by US President Donald Trump continues to play a role today. EU Trade Commissioner Maros Sefcovic plans to discuss the matter with representatives of the US government. He had previously stated that Brussels wanted to reach a negotiated solution. But would resolutely resist if this was not possible. Possible EU countermeasures to the new US tariffs on car imports are also expected soon.

Financial markets around the world are eagerly awaiting a speech by US Federal Reserve Chairman Jerome Powell . Amid the trade conflict instigated by Trump, he will comment on the economic outlook. Investors hope Powell’s appearance in Arlington, Virginia, will provide insight into the future course of monetary policy. A Fed director recently called for a temporary pause in interest rate hikes. Partly because of the inflation risks posed by Trump’s tariff policy.

There’s a lot going on here too. The supervisory board of the struggling steelmaker Thyssenkrupp Steel Europe (TKSE) is convening an extraordinary meeting. The IG Metall union fears that TKSE intends to terminate its supply contracts with Hüttenwerke Krupp Mannesmann (HKM) . Since Thyssenkrupp Steel Europe is the majority owner of HKM with a 50 percent stake. This would be a severe blow to the company with approximately 3,000 employees.

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Sources used:

• With material from the Reuters news agency. With information from News Channels. Statement and reports from reputable news sources, including Reuters, Wikipedia, BBC, CNN. The content has been independently analyzed and rewritten to provide original insights.

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