Global Trade War Escalates with Trump's Reciprocal Tariffs

U.S. President Donald Trump's tariffs on imports, including notably high duties on Chinese goods, are causing global market upheaval. The European Union is preparing retaliatory measures, as Trump's actions disrupt decades-long trade norms. Global markets, consumers, and economies are feeling the impact, fueling fears of a global recession.

U.S. President Donald Trump has implemented "reciprocal" tariffs on numerous countries, igniting a global trade war. Notably, an enormous 104% duty was placed on Chinese goods, while the European Union prepares its countermoves. This shift has disrupted the international trading system, instilling fears of a recession and cutting significant value from major businesses.

Since announcing the tariffs, the S&P 500 has encountered its sharpest downturn since its inception in the 1950s, approaching bear market territory. U.S. Treasuries have also faced considerable declines, showing that even traditionally safe assets are under threat. Furthermore, the U.S. dollar has weakened against other key currencies as market uncertainty prevails.

The European Union is poised to undertake counter-tariffs of its own, aligning with China and Canada in response to Trump's measures. The European Commission has proposed new duties on a variety of U.S. imports. Trump's tariffs are expected to have a more detrimental effect on euro zone growth than initially projected by the European Central Bank, according to insider sources.

(With inputs from agencies.)