Beginning on April 2, 2025, global stock markets began to experience significant economic downturn, as a result of tariffs and trade wars initiated by the president of the United States, Donald Trump. On that day, Donald Trump declared “Liberation Day”, announcing sweeping tariffs that affect almost all aspects of the U.S. economy. He had accepted claims that he was intentionally attempting to cause a stock crash, which increased economic tensions with allies, as well as the possibility of a global trade war and recession. Global stock markets, including in the United States following “Liberation Day”, experienced panic selling. It is currently the largest decline in the global stock market since the 2020 stock market crash, which was caused by the COVID-19 pandemic.

At the beginning of Donald Trump’s second term, he was inaugurated inheriting a particularly strong domestic stock market. While this was maintained for a period of a few weeks after his inauguration, the Trump administration began making and announcing increasingly aggressive trade policies in an attempt to practice protectionism and economic pressure, including heightening previous trade wars, starting new trade wars, heavy tariffs, and increasing tensions with allies; most prominently, Canada. As the administration continued to practice these policies, markets began to experience continued turbulence, volatility, and general uncertainty.

The Dow Jones index lost 4,000 points in the span of 48 hours, being the first back-to-back 1,500+ loss in its history. Japan’s Nikkei dived nearly 8%, triggering a trading curb. The Canadian TSX decreased by 4.8% in one day. VIX market volatility doubled, skyrocketing to more than half of the heights it had achieved during the pandemic, and an increased risk of a recession, and the possibility of economic retaliation exacerbated the effects.