What caused the market drop?
The new import tariffs introduced by the US Presidential decree impose a duty of up to 10% on all imports, and up to 125% on goods from China. The official goal is to stimulate American manufacturing. However, investors perceived this as a threat of a global trade war.
China promptly responded with mirror measures, including the introduction of tariffs on American agricultural products, industrial goods, and aviation. As a result: The S&P 500 fell by 12% from its previous peak, and the Nasdaq by 13%. At the same time, giant companies such as Apple and Nvidia, whose factories and markets are strongly tied to China, lost more than 10% of their share price in a matter of days. For example, Apple, which assembles most iPhones in China, faced the threat of more expensive components and falling sales.
Interestingly, tariffs are not new to Trump. During his first term in office in 2018, he already imposed duties on steel and aluminum, which then raised prices for canned beer and cars. But this time, the scale is much larger and the stakes are higher.
Significant pressure has also been recorded in the US government bond market, where declining prices indicate expectations of rising inflation. This, in turn, raises the cost of government borrowing and increases pressure on the Federal Reserve.
Is the US economy at risk of recession?
After growing steadily at around 3% annually since the end of the COVID-19 pandemic, the US economy is now in jeopardy. Analysts call the situation caused by Trump’s tariffs a “self-inflicted economic disaster.”
S&P Global has raised the probability of a recession in the US to 45% from 35% in March 2025. Investment bank Goldman Sachs estimates the chances of a recession in 2026 at 45%, while Barclays and UBS warn of a possible economic contraction in the coming months.
Capital Economics experts add that without trade agreements with the US partners, the market decline could turn into a “collapse of confidence” among businesses and households. They predict inflation above 5% if Congress does not introduce timely support measures. Markets expect the Federal Reserve to cut interest rates earlier than planned to soften the blow.
It is important to note that the unemployment rate in the United States in April 2025 exceeded 4% for the first time after a stable 3.5% in 2023-2024. This indicates the first signs of a cooling in the labor market amid tariff tensions and rising business costs.
How the stock market drop affects Ukraine
And while at first glance it seems that the US tariffs are far from Ukraine, the situation has serious consequences.
First, Ukraine earns money by selling grain, steel, and iron ore. If the United States and China get bogged down in a trade war, global demand for these goods could fall. According to the World Bank Commodity Markets Outlook (March 2025), China has already reduced agricultural imports due to the domestic slowdown, and the steel market is down 11% year-on-year.
Second, Ukraine depends on American support: financial, military, and humanitarian. In February 2025, The New York Times reported on the Trump administration’s initiative to cut foreign aid, including USAID funding and military programmes for Ukraine.
Third, tariffs raise the price of imports around the world. Electronics, clothing, fuel – all of these can become more expensive in Ukraine. For example, if oil prices rise due to global instability, we will see higher prices at gas stations. This means more expensive food in stores and higher utility bills. For ordinary Ukrainians, this is a significant blow to their wallets.
Interestingly, Ukraine has already gone through something similar. In 2008, during the global financial crisis, foreign investors massively withdrew money from Ukraine, and the hryvnia collapsed. Today, there is a risk that history will repeat itself if global investors decide to avoid countries with unstable economies.
But there is a flip side. The crisis is an opportunity to develop local productionUkrainian companies can occupy niches previously filled by foreign goods if the government supports them with benefits or loans.
What could happen next?
Trump’s tariffs could pose serious challenges to the economy. Analysts predict that if the tariffs remain in place, inflation in the US could jump to 4-5% by 2026. For comparison, in March 2025, it was only 2.4%. More expensive goods will force the Federal Reserve to keep interest rates high, which will slow the economy.
Large retailers like Walmart or automakers like Ford are already preparing for higher costs. Smaller companies may not be able to withstand it and may lay off workers.
In addition, the tariffs are alienating US allies. The European Union is already concerned about the 10% tariffs on its goods. Countries like India or Vietnam may switch to trade with China or other partners. For the United States, this means a loss of influence, and for the world, it means new trade alliances.
Goldman Sachs predicts that the continuation of US tariffs and China’s countermeasures could reduce global GDP growth by 0.7% in 2025-2026, hitting countries with high export dependence the hardest.
It is now known that Trump announced a 90-day “tariff pause” for some countries, which gave the market some relief. In his speech, the President noted that more than 75 countries have asked the United States to discuss tariffs and “have not taken any action in response.”
Currently, the indices are slightly higher, but investors are still on guard. The question is whether Trump will decide to take decisive action again.
As conclusion
Trump’s tariffs shook not only the US stock market but the entire world. Falling stocks, fear of inflation, and trade wars keep investors on edge. For Ukraine, this means new challenges: from reduced exports to a more expensive life. But there are opportunities in every crisis. If Ukraine can find new trading partners or strengthen its domestic market, it can survive.
Our contacts
If you want to become our client or partner, feel free to contact us at support@manimama.eu.
Or use our telegram @ManimamaBot and we will respond to your inquiry.
We also invite you to visit our website: https://manimama.eu/.
Join our Telegram to receive news in a convenient way: Manimama Legal Channel.
Manimama Law Firm provides a gateway for the companies operating as the virtual asset wallet and exchange providers allowing to enter to the markets legally. We are ready to offer an appropriate support in obtaining a license with lower founding and operating costs. We offer KYC/AML launch, support in risk assessment, legal services, legal opinions, advice on general data protection provisions, contracts and all necessary legal and business tools to start business of virtual asset service provider.
The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.
