DAX Drops 2% After Trump Announces Global Tariff Hikes
Trump tariffs higher than expected, the stock market was clearly expecting less. Germany stocks take a dive on increased recession fears.
- Tariffs on China 34%, Vietnam 46%
- Analysts see higher recession risk
- Will ECB come to the rescue?
The DAX opened down over 2% in pre-market trading. The market then recovered some lost ground, as it often does on a gap.
Higher Than Expected Tariffs
Trump announced the extra tariffs on a TV broadcast and took most investors by surprise. Various numbers had been floated in the past weeks, and they weren’t anywhere close.
The following nations have been slapped with these extra tariffs:
- China: 34% on top of 20% applied earlier in 2025
- EU: 20% on top of 25% on some other goods
- Vietnam: 46% on top of the 10% universal tariff
Some countries have been hit harder than others. The White House explains it’s retaliatory against tariffs on US goods and trade barriers, such as subsidies or currency manipulation.
It seems certain good that are not easily available in the US remain tariff free, such as semiconductors.
DAX Live Chart
ECB to Come to The Rescue
The DAX has been defying the laws of gravity, and the markets, for some time. The German economy has been in contraction for the past 2 years, yet the DAX has managed to post successive all-time highs.
Mostly helped by an expanding Chinese economy, many top DAX companies export massively to China and also to the US.
Then there was the ECB loosening and interest policy reduction. Stock markets love cheap money, and the ECB has been cutting rates at a faster pace than ever before.
Lower rates has also weakened the euro allowing German companies to be more competitive with their exports.
My bet is the ECB will cut rates even further than expected, especially if growth in the EU area as whole turns negative.
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