Global Markets Shaken as U.S.-China Trade Tensions Escalate
Global market volatility has surged amid escalating U.S.-China trade tensions fuelled by new tariffs and retaliatory measures by China, echoing financial crises of the past. Policymakers and investors now await key economic data and strategic moves in a rapidly shifting economic landscape.
Published on April 12, 2025
Global markets have experienced rapid volatility over the past ten days amid an intensifying U.S.-China trade confrontation. Spurred by new tariffs introduced during the previous administration, the turbulence recalls the financial crises of 2008 and 2020 and has left investors and policymakers on high alert. In response, the European Central Bank is now expected to further cut interest rates and EU finance leaders are convening for strategic discussions.
Recent reports on April 11 indicate that China has retaliated by adjusting its own tariff rates—increasing them to 125% on certain U.S. imports—and taking additional measures such as targeting American farm products. Meanwhile, high U.S. tariffs, which remain near historic levels, continue to fuel uncertainty. Financial institutions like JPMorgan Chase have reported strong quarterly profits despite CEO Jamie Dimon’s warnings about global economic risks, while emerging markets in Asia and countries like Turkey, Egypt, and South Korea brace for potential borrowing cost hikes and inflationary pressures.