Description: The global markets plummeted as China imposed reciprocal tariffs of 34% on US imported goods, as the global trade war started impacting the largest stock markets. Market indexes such as S&P 500 and Dow Jones Industrial Average saw their largest drops ever since the Covid pandemic of 6% and 5.8% respectively. China has answered Trump’s imposition of tariffs by adding up to 27 US companies on the trade sanctions list which ranged from food products to military and defense components. China also filed a lawsuit against the US with the World Trade Organization while officials stated they were open to direct negotiations with their US counterparts regarding the tariffs.
Impact: The retaliatory and reciprocal tariffs from China were largely expected as the two biggest global economies continued to engage in a global trade war that has substantially destabilized the stock markets. Stock markets are currently in perpetual freefall as countries devise strategies to counter the deteriorating effects on their domestic economies. With negotiations expected to begin in the short to mid-term, the effect of the tariffs could potentially cause larger economic disruptions, especially in countries that are facing existential challenges such as civil wars, humanitarian and security crises. Even though a precise deadline hasn’t been determined as to the impact of the effect of the tariffs, the multilateral trade war is threatening to cause severe destabilization on a global scale, that could have long – term effects.