The economist explained the fall in stock indexes around the world
A serious decline in stock indexes is observed today all over the world — from Asian to European stock exchanges. The sharpest reaction was recorded in the United States, where trading was suspended due to the rapid collapse of quotations. Andrey Barkhota, an economist and financial market expert, told Izvestia on April 7.
"This is due to the fact that the trade war and the policy of the new American administration are causing retaliatory measures from other countries," the expert explained.
According to him, only a few states are ready to compromise, while leading economies, including China and the European Union, impose mirror duties.
"Investors see this as a threat to the growth of production, GDP and consumption, which will eventually hit the profits of companies. As a result, stocks are starting to sell en masse, provoking a market collapse," the expert noted.
According to the expert, the situation had the greatest impact on the United States, where stock markets were forced to suspend trading. This happened in accordance with the rules, according to which, in case of a sharp drop, trading must be stopped in order to give investors the opportunity to calm down.
"US President Donald Trump did not take into account how harsh the reaction of the financial establishment would be. Now there is even a movement being formed aimed at its displacement," the expert said.
However, there are also positive signals — currency markets remain more stable than stock markets, and some countries, such as India and Vietnam, are looking for a compromise with the United States.
"Trump calls his measures a "bitter medicine" to reduce the budget deficit. But so far we are not seeing de-escalation, but a deepening crisis. Further dynamics will depend on the real impact of trade restrictions on economic growth, and not on short—term market fluctuations," concluded Barkhota.
On April 2, Trump announced large-scale measures: base tariffs of 10% are being introduced for all products supplied to the United States. For the EU, this figure has been raised to 20%, and for China — to 34%. In his speech, the president called April 2 the day when Americans will become rich again.
The next day, Georgy Ostapkovich, director of the HSE Center for Economic Research and Economic Analysis, said that the introduction of US duties on imported goods could trigger a chain reaction that could lead to a global financial crisis.
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