Black Monday 2.0? China braces for ‘ugly’ plunge; Japan looks at ‘available means’- will India take ‘significant’ steps?

The world is still reeling from Donald Trump's reciprocal tariffs, which spooked Asian and US stocks, with experts warning of another ‘Black Monday’, reminiscent of the 1987 Wall Street crash. While the baseline charge has kicked in, higher duties on some countries — which replace, rather than add to the 10% rate — are due to start on April 9.

Although China retaliated with 34% tariffs on all US goods, its markets expect a battering Monday, April 7, as trading resumed.

India said it does not plan to retaliate against Donald Trump's 26 per cent tariff on imports, the nation has looked into a clause that offers a possible reprieve for trading partners who “take significant steps to remedy non-reciprocal trade arrangements," reported PTI.

Japan, South Korea, India, and other Asian trading partners have also been lukewarm in responding to Donald Trump's tariff onslaught.

India ‘unlikely to retaliate’

India is unlikely to retaliate immediately to the 26% reciprocal tariff, instead focusing on negotiating a bilateral trade deal with the US to reduce duties, according to an Indian government official quoted by Reuters.

India views itself as having an edge over regional rivals by being among the first to initiate trade talks with Washington. This positions India better than Asian peers like China, Vietnam, and Indonesia, which have been impacted by higher US tariffs, reported PTI, citing another government official.

China's 'ugly' start

On Monday, Hong Kong markets led regional losses, with the Hang Seng Index dropping 10.37%. Mainland China’s CSI 300 fell 6.31%.

Earlier in the day, a fund manager in China had predicted the plunge. “It will be an ugly start on Monday, which will be a buying opportunity for me,” said Xin-Yao Ng, a fund manager at Aberdeen Investments.

“Some estimates suggest tariff wars can bring down China’s GDP growth by 2 percentage points, but the government will negate that pain with stimulus and trade deals with non-US countries in the due course," added Xin-Yao Ng, Bloomberg reported.

Japan looks at ‘all available means’

Japanese Prime Minister Shigeru Ishiba said it will continue to ask Donald Trump to lower tariffs against Japan, but acknowledged results "won't come overnight."

"As such, the government must take all available means" to cushion the economic blow from U.S. tariffs such as offering funding support for domestic firms and taking measures to protect jobs, Ishiba told parliament, Reuters reported.

South Korea to prepare support measures

South Korea's finance minister said on Monday the government would prepare support measures for sectors with urgent needs, ahead of US President Donald Trump's 25% tariff, which will come into force this week.

"Minister Choi Sang-mok emphasised the need to analyse the impact on the macroeconomy and prepare support measures for sectors with urgent needs," the ministry said in a statement, reported Bloomberg.

Taiwan to start from ‘zero tariffs’

President Lai Ching-te stated that Taiwan does not plan to retaliate with tariffs and aims to improve reciprocal tariffs through discussions with the US. Talks may begin with a focus on "zero tariffs," while industries like electronics, petrochemicals, and natural gas seek to increase investments in the US, reported Bloomberg, citing a statement from the presidential office.

Blood Monday for Indian stock market?

The Indian stock market sharply declined on April 7, following Wall Street's previous downturn. The Nifty 50 opened with a 1,146-point drop, or 5%, at 21,758, marking its largest intraday loss since March 2020. Similarly, the Sensex opened sharply lower, down 5.19% at 71,449.