Trade Tensions Surge as Trump Escalates Tariff War with China

Traders flocked to safe havens like the yen as President Trump intensified the tariff war against China. Despite a 90-day tariff pause for some countries, markets remain uneasy about long-term impacts on growth. The U.S. dollar saw varied reactions, while the Chinese yuan weakened.

In a move that rattled global markets, traders moved towards safe currencies such as the yen and Swiss franc, selling the Australian dollar, after President Donald Trump heightened tariffs against China even as he suspended tariffs for 90 days on other nations.

Despite this brief reprieve, Trump's tariff hikes tempered optimism, with markets concerned about long-term growth effects. Analysts noted that the U.S.'s global standing has suffered irrespective of future developments. A cautious market reacted with fluctuations in the U.S. dollar and Chinese yuan.

U.S. Treasury Secretary Scott Bessent claimed the tariff pullback was strategic, aiming for more negotiations, while rising tensions signal a potential economic downturn. The U.S.-China confrontation is projected to escalate, as China labels U.S. trade actions a catalyst for economic conflict.

(With inputs from agencies.)