US President Donald Trump’s recent statements have brought global trade wars back to the agenda. Trump announced that new tariffs will be imposed on some imported products in order to protect the US economy. His announcement that a 25% customs duty will be imposed on some products imported from Mexico and Canada in particular had an immediate impact on global markets. This move had a great impact not only in the US but also in the global trade arena.
China’s Retaliation: New Customs Duties on Agricultural Products
China, which responded quickly to Trump’s statements, announced that it will impose an additional customs duty of up to 15% on some products imported from the US. The agricultural sector is particularly notable among the products to be taxed. By imposing additional duties on strategic agricultural products such as chicken and soybeans, the Chinese government has made a move that will put US farmers in a difficult situation. Since agriculture is a sector that has an important place in Trump’s election campaign, it is also considered that this step carries a political message.
China’s move is actually a direct response to a statement Trump made in recent weeks. The US President had announced that an additional 10% customs duty would be imposed on all products imported from China. China's counterattack shows that the trade wars will not end in the short term and that tensions will continue.
Impact on Global Markets: Sharp Decline in Stock Markets
These mutual sanctions moves had a major impact on global markets. While stock indices began to decline, investors began to move away from risky assets due to uncertainty. While stock indices entered a sell-off in the US, bond yields declined. At the same time, the Mexican peso and the Canadian dollar also lost value in response to these developments.
Technology stocks in particular were negatively affected by these developments. China imposed new restrictions on the export of critical minerals in response to the sanctions imposed on it by the US in the field of chips and artificial intelligence. These restrictions imposed on rare earth minerals, which are used in many sectors from smartphones to missile systems, could affect many sectors, especially US technology companies.
The Re-Emergence of the US-China Trade War
The ongoing economic tension between Trump and the Chinese government is actually a continuation of the long-standing trade wars. Trump, in his first term in office, pursued many sanctions policies against China and aimed to strengthen the US economy by reducing imports from China. However, China's retaliation and reactions in global markets made it difficult for these policies to yield the expected results.
The escalating trade wars between the US and China continue to deeply affect not only these two countries but also the global economy. Investors and large companies in particular are carefully evaluating how to act in an environment of uncertainty. The Trump administration's new economic steps and counter-moves from China will be closely monitored in the coming days.
During this process, volatility in the markets may continue and changes may occur in the global trade flow. Whether the US-China tension will increase further will depend on both economic and political developments.
Author: Besim Şen
