Escalation of US-China Trade War
China has intensified its trade conflict with the United States by announcing an additional 34% tariff on American goods. This move comes in response to US President's policies, further heightening fears of a global recession. The ongoing trade war has already led to significant disruptions in global stock markets.
China's Strategic Responses
- China has instituted export controls on certain rare earth materials.
- Eleven US entities have been added to China's "unreliable entity" list, allowing for punitive measures against foreign firms, especially those involved with arms sales to Taiwan.
Impact on Global Economy
- JP Morgan predicts a 60% chance of a global recession by year-end, up from a previous 40%.
- Economic activities such as mergers, acquisitions, and initial public offerings have been significantly affected, with companies like StubHub Holdings Inc and Klarna Bank AB halting planned actions.
Responses from Other Nations
- Canada has experienced its first monthly employment decrease since 2022 due to tariff-induced uncertainties.
- Japan's Prime Minister labeled the situation a "national crisis" as banking shares plummeted, marking a severe downturn in Tokyo's stock market.
US and European Reactions
US Secretary of State downplayed fears of an economic crash, suggesting that market reactions were adjustments to a changing global trade order. Meanwhile, the European Union's trade commissioner, promoted negotiations to reach a fair and mutually beneficial deal.
