Tariffs, markets and panic: why things are not so dramatic
8 April 12:51
After the United States declared a trade war against 185 countries, the stock market lost $6.6 trillion on April 3-4, the largest two-day drop in history. Since the beginning of the year, when Trump began his second presidential term, the market has lost $11.1 trillion.
The announcements by China and the European Union about retaliatory tariffs surprised traders, emphasizing how much the situation will affect the US economy. Analysts have already dubbed this tariff crisis “economic Armageddon,” and the VIX Fear Index on Wall Street has reached its highest level in 8 months amid massive stock sales.
In addition to the existing tariffs, China is introducing a new 34% duty on all products imported from the United States on April 10 in response to Trump’s policy. In 2024, trade between the US and China reached $688.28 billion, while the US exported $163.62 billion worth of goods to China, three times less than it imported from China.
The impact of duties on the US economy: “just one part of a larger strategy”
In an exclusive commentary for , economic expert Danylo Monin shared his vision of the situation on global markets and the impact of the introduction of duties on the US economy, stock markets, and cryptocurrencies. According to him, there is currently a “panic-inflated bubble” and the real consequences of the tariffs will be much less than predicted.
Monin believes that the fall of markets and cryptocurrencies is largely caused by bad expectations from the introduction of tariffs, and the tariffs themselves are exaggerated in their significance. He noted that despite fears of inflation, the situation actually points to the possibility of deflation.
“Oil has already fallen from $80 to $63, which means that energy resources are getting cheaper. For some goods, logistics will become cheaper, and prices for consumer goods may go down,”
– the expert believes.
He also noted that in other countries where there is a lot of competition, prices for many goods may decline, which will help to avoid high inflation.
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Impact on the global economy: there will be no recession
Monin is confident that a global recession is not inevitable, even if the US continues to impose tariffs.
“Of course, the change in tariff policy creates certain difficulties for businesses and politicians, but I see no reason for a global recession. The US economy may decline by 1-1.5% of GDP, but this is not a catastrophe. The same applies to China: their exports to the US account for only 20% of the total, so the impact of tariffs will be minimal,”
– he added.
Monin does not rule out that a fall in stock markets could lead to problems in the financial sector similar to those experienced during the 2008 financial crisis.
“If banks start to fall because of over-lending to each other, it could cause a global financial crisis. But I believe that such events will not happen. The situation will stabilize in one or two quarters,”
– the economist believes.
Forecast for cryptocurrencies and stock markets
According to Monin’s forecasts, the fall of stock markets and cryptocurrencies is not yet complete. He noted that the NASDAQ technology index has already fallen by 27% since February 2025, and although this is a significant drop, it is still far from the level of the COVID-19 decline (50%).
“The decline in the cryptocurrency and equity markets is likely to continue, but I don’t think it will last long. We will see a recovery soon, as politicians and central banks can change their strategy and support the markets,”
– says Monin.
In his opinion, the panic that has gripped the markets is not justified. He believes that the situation will stabilize, and it will be only a short-term phenomenon that everyone will soon forget as a result of unfounded hysteria.
“I think we will see stability in the near future. The fall of stock markets and cryptocurrencies is just part of a big cycle, and the recovery will not be long in coming,” he concluded,
– he summarized.
Current situation on the markets
It is worth noting that on Friday, the STOXX 50 index fell by 2.9% and the overall STOXX 600 by 2.5%, dropping to its lowest level since mid-January. At the end of the week, the STOXX 50 fell by 6.7% and the STOXX 600 by almost 5.9%, which was the biggest weekly drop in European markets since March 2022.
On the same day, the Dow Jones fell another 5.5% (9.5% in two days) to its lowest level in 9 months, the S&P 500 index fell 5.97% (10.9%), and the Nasdaq Composite fell 5.82% (11.8%) to its lowest level in 11 months.
According to CNN, after the introduction of the duties, Trump intensified negotiations with the leaders of many countries on the introduction of retaliatory tariffs and has already reached agreements with Vietnam, India and Israel on possible tariff reductions. Argentina also reported that it is in the final stages of negotiations with the US on the introduction of a zero tariff for itself.
Over the weekend, more than 1,200 protests took place in the United States, involving millions of people dissatisfied with the Trump administration’s policies. However, U.S. Treasury Secretary Scott Bessent said in an interview with blogger Tucker Carlson that the fall in the U.S. stock market was more related to the recent launch of the Chinese AI assistant DeepSeek than to Trump’s policies, adding that it was difficult to comment on such statements by high-ranking officials.
Trump said that Elon Musk was returning to his business and would no longer head the government’s DOGE department, which was supposed to cut US budget spending. Musk himself, in turn, “unexpectedly” expressed the idea of creating a free trade zone between the US and Europe with zero tariffs, which is probably due to the sharp drop in Tesla sales in the EU by 15-75% in the first quarter after Musk’s controversial statements and actions.
This week, markets will be waiting for Trump’s reaction to the protests and the possible abolition of some duties for certain countries, which may calm stock markets a bit. However, this is likely to increase pressure on commodity markets, which will try to rebuild trade chains in line with the new tariffs, as many companies have already announced that they will suspend shipments to the US until the tariffs are determined.
