In brief
Concerns about a potential trade war shake global markets while US stocks show mixed reactions.
In the wake of US President Donald Trump's recent tariff announcements, global investors are on edge. Trump's plan to impose import taxes on "all countries" has triggered fears of a full-blown trade war affecting economies worldwide. Following his statements, stocks in Asia and Europe experienced declines, yet the US market showed resilience, bouncing back slightly amidst the turmoil.Trump's upcoming tariff announcement, labeled as America's "Liberation Day," is set to add to existing import taxes on aluminium, steel, and cars. While he expressed the possibility of exemptions for some countries last week, his comments over the weekend hinted at a broader approach, leading to heightened uncertainty among investors.The UK government is bracing for impact, confirming that it may enact retaliatory measures against US tariffs, while the European Union and Canada have already prepared countermeasures. The escalating situation has sparked fears of a recession in the US, further unsettling investors.In the US market, the S&P 500 has dropped nearly 10% since mid-February, marking one of its worst months in years. However, on Monday, the Dow closed up 1%, and the S&P improved slightly as uncertainty lingered. Meanwhile, gold prices soared to a record high, showcasing its appeal as a safe investment during turbulent times.Experts caution that in the long run, tariffs could lead to increased prices for consumers, lower sales for companies, and ultimately, inflation—contradicting Trump's promises to tackle these issues. Business leaders are concerned about the effects on investment, with some, like Brompton Bicycle's CEO, contemplating potential withdrawal from the US market.As tariff negotiations progress, the deadline for TikTok's Chinese owner, ByteDance, to find a non-Chinese buyer looms, demonstrating how interconnected trade discussions are becoming amid rising political tensions.
