Trump’s Trade War With China Sends Shockwaves Through Global Markets

Geopolitical tensions escalate as tariffs and tech bans trigger supply chain chaos.

Beijing retaliates with export controls—while Wall Street hedges with crypto (because nothing says ’stable store of value’ like 20% daily swings).

The only winners? Lawyers and arms dealers.

Tariffs and the Economy

The U.S. government is attempting to support domestic production through high tariffs on products imported from China. The imposed tariff rate of 145%, along with a 90-day temporary regulation, has contributed to increased uncertainty in the markets. The 60% drop in cargo shipments has highlighted the extent of disruptions within the supply chain.

Expert Opinions and Expectations

Economists predict that if current trade policies continue, the U.S. economy could face a 4% decline in Gross Domestic Product (GDP) and experience a recession lasting two quarters. Institutions such as Polymarket and JP Morgan assess the probability of an economic downturn to be between 56% and 60%, while also noting the potential increase in market risks.

Torsten Slok: “If tariff conditions remain stable, a recession by 2025 is likely.”

Evaluations indicate that the trade war affects not only tariff rates but also impacts stocks, bonds, gold, and cryptocurrency markets. This situation has prompted the need for caution among market participants and economic actors.

Calls from the Federal Reserve for interest rate cuts may alleviate some effects of an economic downturn; however, concrete actions have yet to be taken. Major retailers are warning that potential supply issues and similar disruptions could negatively affect the labor market.

Small businesses are likely to suffer more from this situation, leading to potential bankruptcies and layoffs. Upcoming unemployment data is expected to reveal these risks further.

Based on current indicators, the U.S. economy is anticipated to follow a volatile path due to existing trade policies. Economic uncertainty and rising risks underscore the importance of timely preventive measures.