As a Result of Trump's Tariffs, the U.S. Emerges as the Biggest Loser in Markets

President Donald Trump’s aggressive trade policy overhaul appears to be taking a greater toll on U.S. financial assets than on those in some of the major economies targeted by his latest round of tariffs.

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Following Trump’s sweeping tariff announcement after markets closed on Wednesday, U.S. stock futures plummeted more than 4%, while the dollar also experienced a sharp decline. In contrast, the impact on global markets was comparatively milder.

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The Stoxx Europe 600 dropped 1.9%, while the euro climbed 2.2% against the dollar, reaching its highest level since October. Meanwhile, Asian equities broadly declined by as much as 1.7%.

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The widespread selloff across global markets signals that investors see few, if any, beneficiaries in what is now the largest escalation of the ongoing trade dispute. However, the reaction also suggests that the U.S. itself could emerge as one of the biggest casualties of Trump’s protectionist stance.

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“Global investors will be reassessing their exposure to the U.S.,” said Neil Birrell, chief investment officer at Premier Miton Investors. “Would international investors start shifting capital away from U.S. assets because of this? The answer is probably yes.”

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Dollar Faces Heavy Selling Pressure

The dollar faced its worst trading day in over two years, as market participants braced for the broader economic fallout. The Japanese yen, often viewed as a safe-haven currency, surged 1.9% against the greenback, while yields on 10-year U.S. Treasuries fell to their lowest levels since October. The drop in yields added further pressure on the dollar.

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“The concern over U.S. growth due to the tariff escalation, combined with continued declines in U.S. equities, means the dollar isn’t getting the typical safe-haven boost it has enjoyed in the past,” explained Ray Attrill, head of foreign-exchange strategy at National Australia Bank Ltd.

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Equity Markets Under Strain

Trump’s latest trade move has placed additional stress on U.S. equities, which were already struggling this year. Investors had been bracing for the potential inflationary effects of his policies, along with an increased risk of a recession in the world’s largest economy.

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Prior to the tariff announcement, the S&P 500 had already fallen 3.6% in 2025, while the Nasdaq 100 had declined around 7%. The so-called "Magnificent Seven" technology stocks—comprising some of the largest names in the sector—have also seen significant losses.

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By contrast, Germany’s DAX has climbed 10% so far this year, underscoring the divergence between U.S. and European markets in the face of recent trade disruptions.

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Rather than capitalizing on the latest dip in U.S. markets, some investors are looking elsewhere for opportunities.

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“We aren’t buying the dip in the U.S.,” said Aneeka Gupta, head of macroeconomic research at Wisdom Tree UK Ltd. “In these uncertain times, investors are turning to income-generating assets as a safer option while they wait to see how affected nations respond with their own countermeasures.”

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As global markets continue to digest the impact of Trump’s sweeping tariff measures, the uncertainty surrounding trade policy is expected to weigh on investor sentiment in the coming weeks.

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Whether markets stabilize or see further volatility will largely depend on how governments and businesses react to this latest escalation in the trade dispute.

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