China Hits Back
On Friday, China announced it would raise tariffs on imports from the United States to 125%, significantly escalating the ongoing trade war. This move came in direct response to President Donald Trump’s decision to increase tariffs on Chinese goods, effectively pushing total rates to 145%
“The new U.S. tariffs are an act of unilateral intimidation and coercion,” China’s Ministry of Finance state
Fallout: Global Markets in Turmo
China’s retaliatory measures had an immediate impact on global financial markets
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Stock markets plunged worldwide
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The U.S. dollar weakened
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Treasury bond sell-offs accelerated
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Gold surged to an all-time high as investors sought safe asse
“The risk of recession is now much higher than just a few weeks ago,” said Adam Hetts, Global Head of Multi-Asset at Janus Henders
U.S.-China Trade on the Bri
In 2024, trade between the U.S. and China totaled over $650 billion, but analysts now warn that the tit-for-tat tariff war may bring it to a near halt
“This is effectively an admission that trade between the two nations is essentially over,” analysts at UBS wrot
A Fragile Pause and Diplomatic Mov
In an attempt to ease tensions, Trump recently announced a 90-day tariff suspension for dozens of countries. However, the temporary relief failed to reassure investors, with markets quickly refocusing on the escalating U.S.-China conflict
“This 90-day pause means 90 days of uncertainty for businesses across the Atlantic and beyond,” said French President Emmanuel Macron
The European Union responded by suspending its own retaliatory tariffs and exploring ways to use the pause to negotiate a deal with Washingt
Global Reactio
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EU: Finance ministers held emergency talks to coordinate a response
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Japan: A new trade task force was created and is planning a visit to Washington
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Vietnam: Official trade talks with the U.S. have begun
Meanwhile, Chinese President Xi Jinping urged the EU to stand together against what he called “unilateral bullying.”
What’s Nex
Global policymakers are bracing for further disruptions and may reconsider rate cuts in response. The European Central Bank is set to discuss the potential impact at its upcoming meeting
Meanwhile, corporate earnings reports in the coming days are expected to reveal the first tangible signs of how the trade war is affecting business operations and profits.
