“They’re worried about what follows – a recession here domestically and then globally, leading to a possible depression.”

Speaking to reporters aboard Air Force One on Sunday, Trump indicated he was not concerned about losses that have wiped out trillions of dollars from world stock markets.

“I don’t want anything to go down. But sometimes you have to take medicine to fix something,” he said as he returned from a weekend of golf in Florida.

Trump said he had spoken to leaders from Europe and Asia over the weekend, who hope to convince him to lower tariffs as high as 50% due to take effect this week.

“They want to talk but there’s no talk unless they pay us a lot of money on a yearly basis,” Trump said.

His tariff announcement has met with bewildered condemnation from other leaders and triggered retaliatory levies from China, the world’s No.2 economy, which called Trump’s behaviour “economic bullying”.

Shares in Taiwan plummeted almost 10% – the biggest one-day percentage fall on record – and stock futures pointed to another brutal day for markets in the U.S.

European defence shares, previously hot performers thanks to expectations of a spending boom by nation states, were on course for their biggest one-day decline since April 2020.

Billionaire fund manager Bill Ackman, who endorsed Trump’s run for president, called for the tariffs to be paused to avert an “economic nuclear winter”. “The president is losing the confidence of business leaders around the globe,” he added.

TACTICS, OR NEW REGIME?

Investors and political leaders have struggled to determine whether Trump’s tariffs are part of a permanent new regime or a negotiating tactic to win concessions from other countries.

“The imposition of tariffs by the United States on European goods and services is an attack on the free trade that has ensured prosperity around the world,” Danish foreign and trade minister Lars Lokke Rasmussen said ahead of the EU meeting.

“From the European side, we cannot just roll over.”

Some worry, however, that a forceful response risks even more blowback on European exporters of everything from French Cognac and Italian wine to German cars.

Germany’s Friedrich Merz, who is set to take charge of Europe’s largest economy within weeks, told Reuters the market turmoil underscored the need for his country to regain competitiveness, calling for tax cuts and lower energy prices.

Prime Minister Shigeru Ishiba of Japan, one of Washington’s closest allies in Asia, is also trying to cut a deal with Trump but told parliament on Monday that it may take time.

Investors are not hanging around though.

Tokyo’s Nikkei .N225 plunged to a 1-1/2-year low on Monday, led by the country’s banks, which have shed almost a quarter of their market value in three trading days.

Even gold, usually a safe haven amid market stress, was caught up as investors dumped it to cover losses elsewhere.

Emerging markets were also grappling with how best to support their currencies amid the market turmoil.

Investors are now betting the growing risk of recession could see the U.S. Federal Reserve cut rates as early as next month. Fed chief Jerome Powell has so far indicated he is in no rush though.

Some governments in Asia have already signalled a willingness to engage with the U.S. to avoid the duties.

Taiwan’s President Lai Ching-te on Sunday offered zero tariffs as the basis for talks, while an Indian government official said Delhi does not plan to retaliate. Vietnamese leader To Lam agreed in a phone call with Trump on Friday to discuss a deal.

In Europe, Dutch Trade Minister Reinette Klever said on Monday that getting talks going with Washington was essential.

“We need to get ourselves at the table with the Americans and see how we can lower these tariffs,” she said.