Trump’s Tariffs Torpedo Global Markets—Again

Trade wars flare as protectionist policies trigger market tremors. Wall Street’s ’buy the dip’ brigade left scrambling—turns out tariffs actually hurt profits.

Key impacts:

- Supply chains snap under pressure

- Emerging markets bleed liquidity

- Commodity traders feast on volatility

Meanwhile in crypto-land: Bitcoin quietly outperforms traditional assets YTD. But hey, keep trusting those fiat monetary policies.

Analyst says Trump’s tariffs are causing investor uncertainty

In this excellent piece, Turalay Kenc explores Trump’s tariff policies through the lens of the Triffin Dilemma — the inherent conflict a currency faces when it also serves as the global reserve.

We’re making it publicly available ahead of our upcoming Global Economic Outlook. https://t.co/2S07h1YHxu

— Ahmet Kaya (@KayaAhmetIhsan) May 2, 2025

A study published in the National Institute Global Economic Outlook by Professor Turalay Kenc on May 1 revealed that President Trump’s tariffs sent “shockwaves through global markets,” triggering sharp selloffs, heightening investor uncertainty, and disrupting international trade flows.

Kenc noted that these tariffs, introduced under the guise of economic nationalism and allegedly aimed at reducing trade deficits while protecting domestic industries, targeted a broad range of imports — from industrial metals such as steel and aluminum to automobiles and consumer goods.

According to Kenc, while the tariffs were framed as corrective measures to address perceived trade imbalances, they effectively acted as a “beggar-thy-neighbor policy,” attempting to improve the U.S. terms of trade at the expense of trading partners.

He added that this approach provoked retaliatory tariffs from major economies such as China, the European Union, and Canada, destabilizing established global value chains, causing notable supply chain fragmentation, and amplifying input costs for domestic producers and international firms reliant on cross-border production networks.

“The economic repercussions of these trade tensions were rapidly reflected in financial markets. In a marked escalation, the monthly Global Economic Policy Uncertainty (EPU) Index increased sharply from 183 in March 2024 to an unprecedented high of 460 in January 2025.”

–Professor Turalay Kenc, former Deputy Governor of the Central Bank of Turkey 

The EPU Index, which quantifies uncertainty based on the frequency of policy-related economic uncertainty in leading media outlets, spiked amid rising anxieties over the macroeconomic consequences of Trump tariff wars, the potential erosion of the multilateral trading system, and the risk of supply chain disruptions feeding through to higher inflation and slower global growth, Kenc claimed.

China re-evaluates calls from Washington for talks over tariffs 

China‘s Commerce Ministry said on Friday that it was evaluating an offer from Washington to hold talks over 145% U.S. tariffs, to which it had responded with 125% levies. Washington and Beijing have been locked in a cat-and-mouse game over tariffs, with both sides unwilling to be perceived as backing down in a trade war that has “rocked” global markets and disrupted supply chains. 

However, the Commerce Ministry warned the U.S. not to engage in “extortion and coercion,” adding that any attempts would simply “not work.”

The Ministry also stressed that the U.S. should be prepared to take action in correcting some of its “erroneous practices” and cancel unilateral tariffs–and that Washington needed to show “sincerity” in negotiations.

The Chinese Foreign Minister, Wang Yi, supported these sentiments pointing out that choosing to remain silent, compromise and cower “only made the bully want to push his luck more.”

Trump’s administration has suggested that it is close to a deal with India, South Korea, and Japan to avert more tariffs in the weeks to come.

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