Trump tariff turmoil sparks week-long global chaos as steep new tariffs from President Donald Trump shake the economy. While a brief 90-day tariff pause offered some hope, fears of a recession have only grown as tensions with China escalated.
The U.S. stock market plummeted on Thursday, with the S&P 500 falling 3.5%, marking a 15% drop from its February peak. Bond yields spiked, gold hit a record high, and Asian markets mirrored the U.S. sell-off, underscoring how deeply Trump’s trade actions are rattling financial systems.
Trump paused tariffs on dozens of countries—excluding China, Mexico, and Canada—to ease investor anxiety. However, his sharp tariff hike on Chinese imports, now up 145% since taking office, quickly overshadowed the move.
Markets on Edge
Investors have moved capital into safe havens like gold, while selling off U.S. Treasuries, causing the 10-year yield to surge at its fastest pace since 2001. Goldman Sachs now places the probability of a U.S. recession at 45%, citing trade instability and rising import costs.
Despite the turbulence, Trump expressed confidence in reaching a deal with China. “I think that we’ll end up working out something that’s very good for both countries,” he said, even as Beijing retaliated by restricting Hollywood film imports—a notable blow to American soft power.
Global Fallout
International reactions have varied. The European Union has paused its first round of counter-tariffs, worth over $23 billion, while continuing to assess Trump’s broader trade measures. European leaders warned that the U.S. tariffs could shave 0.5% to 1% off EU GDP, possibly tipping the continent into recession.
Countries like Vietnam, Japan, and Taiwan are pushing forward with bilateral trade talks in hopes of avoiding further tariffs. Meanwhile, over 75 countries have shown interest in opening negotiations with the U.S., according to Treasury Secretary Scott Bessent.
Even U.S. allies Canada and Mexico remain under a 25% fentanyl-related tariff, unless they fully comply with strict origin rules outlined in the USMCA agreement.
Recession Warning Signs
With inflation still elevated, global supply chains snarled, and business leaders reporting rising costs and falling demand, fears of a deeper economic crisis are becoming harder to dismiss. Yale University researchers say the current average U.S. import duty rate is the highest in over a century.
For now, the brief reprieve hasn’t reassured markets. Instead, the rapid escalation and unpredictable policy shifts continue to shake investor confidence and push the global economy closer to the edge
Source: Reuters
