Description: The global trade war instigated by US President Donald Trump intensified as US market indexes and the dollar plummeted on market closings on Monday. Trump in the meantime has publicly attacked the Chief of the US Federal Reserve Jerome Powell, blaming him for not lowering interest rates which could substantially halt US economic progress. China has issued strict warnings towards countries leveraging the trade war in line with US geoeconomic interest while damaging China’s global outreach. The escalation followed last week’s trade tour from Chinese President Xi Jinping who attempted to flock numerous countries and strengthen strategic ties in the region. Investment markets have started giving in to the fear of global economic recession as investments in gold and the Swiss franc marked significant upsurges. Investment indexes such as the Dow Jones Average fell 2.48% while the US dollar marked its largest fall of 0.87% since 2022.
Impact: The US – China trade war continues to disrupt the global investment market and economy dictating unconventional market behavior and the conceptualization of unorthodox strategic partnerships. Trump’s blanket tariff strategy currently causes substantial damage to the US market while China is still scrambling to identify significant markets to output their production and manufacturing power, creating co – dependent strategic alliances. The issued threat from the Chinese Commerce Ministry envisaged significant shift as China goes on the offensive in the trade war as opposed to previous attempt to conceal its foreign economic policy as amicable and cordial. Trump’s hardened approach with the tariff foreign policy was rapidly uncovered to be a targeted attempt to block Chinese export dominance and reposition the US economic power on a global scale. Under the current conditions, the US is looking at losing the initial trade battles with the possibility of an economic rebound in the mid to long – term. China would continue to push diplomatic endeavors towards solidifying its position globally which has already resulted in positioning the country in an advantageous position, currently in the trade war.