The impact of Trump's tariffs sweeps across the globe! Asian stock markets are mired in dumping, and the countdown to The Federal Reserve (FED) interest rate cut begins.

The tariff storm of the Trump administration is stirring up waves in the global financial markets. Major Asian stock markets continued last week's big dump on Monday, with investor sentiment falling into extreme panic. Taimur Beg, the chief economist of DBS Bank, issued a stern warning: "The current risk aversion in the market has shown self-reinforcing characteristics, and any new protectionist measures could become the last straw that breaks the camel's back."

This senior economist from Singapore pointed out that the second round of tariff escalation plans brewing in the United States could provoke reciprocal countermeasures from economies such as the European Union, pushing the trade war into a stage of full confrontation. What is even more concerning is that this policy confrontation is forcing a shift in the Federal Reserve's policies—despite the core inflation rate remaining at a historical high of 6%, the risk of economic growth stalling has already compelled the Federal Reserve to consider interest rate cuts as a response.

The latest modeling from DBS Bank shows that the U.S. economy is entering a "low growth high inflation" stagflation trap, with a probability as high as 45%. More critically, the bank has raised the probability of a recession in the U.S. economy over the next 12 months to 35%. This will directly impact the export-oriented growth model of emerging Asian economies, creating a domino effect.

"The global trade system is undergoing a paradigm shift." Beg emphasized in the report that traditional economic policy tools may fail in the face of structural shocks, requiring policymakers in various countries to demonstrate greater wisdom. For the Asian market, finding new engines of growth amidst the wave of protectionism has become a major issue concerning regional economic stability.

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