Trump’s Tariffs Rattle Markets but Global Economy Proves Resilient

President Trump's 'Liberation Day' tariffs, announced on April 2, 2025, sent shockwaves through financial markets. The S&P 500 plunged double-digits within days as credit default swaps spiked, reflecting heightened systemic risk. Non-systemic banks bore the brunt, though all lenders faced pressure. Exporters grappled with soaring input costs while inflation expectations climbed—a Ripple effect extending far beyond trade.

Against expectations, the global economy demonstrated remarkable resilience. Stock markets rebounded, inflation remained contained in key economies, and growth projections improved across Europe, Asia, and Latin America. Strong pre-crisis balance sheets, manageable debt levels, and moderating energy prices provided buffers. Technological Optimism emerged as an unexpected stabilizing force.