U.S.-China Trade War Escalates in 2025: Trump’s 104% Tariff Spurs Retaliation and Global Market Turmoil
A Renewed Trade Battle Between Two Economic Superpowers
The ongoing economic chess match between the U.S. and China took a dramatic turn on April 8, 2025, as the Trump administration announced a sweeping 104% tariff on all Chinese exports to the United States, effective at midnight. The announcement came just hours after China imposed a 34% tariff on American goods, reigniting tensions that many believed had cooled since the original 2018 trade skirmishes.
In response, Treasury Secretary Scott Bessent called China’s move a “strategic mistake,” pointing out the stark trade imbalance—$438.9 billion in Chinese exports to the U.S. compared to just $143.5 billion in U.S. exports to China in 2024.
China Strikes Back with 84% Tariff on American Goods
On April 9, Beijing doubled down, unveiling an 84% tariff on $23 billion worth of U.S. imports, including key commodities such as soybeans, poultry, and diamonds. Chinese officials warned they would “fight till the end,” framing the U.S. action as economic blackmail.
This tit-for-tat escalation has rattled investors and policymakers worldwide. The S&P 500 opened higher but quickly lost momentum, while European and Asian markets tumbled on fears of a global slowdown.
Global Markets React: Volatility Surges, Oil Prices Plunge
The ripple effects have been swift and severe. Oil prices dropped below $60 a barrel, hitting their lowest level since 2021. Bond markets experienced steep sell-offs, and central banks in the EU and UK issued warnings about rising risks to financial stability.
President Trump defended the tariffs as a catalyst for reshoring U.S. manufacturing and reducing dependency on foreign imports, stating, “This is a great time to bring companies back home.” However, economists and analysts voiced concerns about rising costs, slower growth, and the potential for long-term damage to the global economy.
Will This Escalate Into a Full-Blown Global Recession?
Experts warn that the trade war may have just entered a prolonged phase. Market strategist Yeap Jun Rong and economist Zhiwei Zhang stressed that the uncertainty could dampen global GDP growth, disrupt supply chains, and usher in a new era of economic nationalism.
As of now, neither side shows any signs of backing down. The EU is also considering its own countermeasures against recent U.S. steel and aluminum tariffs, which could widen the conflict into a multi-continent trade war.
What Traders and Investors Should Watch
If you’re a trader or long-term investor, these are the key areas to monitor:
-
Tariff timelines and updates from both governments
-
Global market reaction, especially commodities and manufacturing
-
Supply chain disruptions affecting multinational companies
-
Currency fluctuations, particularly USD/CNY volatility
We’ll continue covering these developments in the War Room and provide real-time trade setups influenced by tariff-driven volatility.
