A recent surge in US tariffs has sent shockwaves through the global economy, leaving markets reeling and sparking concerns over slowing growth, higher inflation, and deteriorating economic conditions.
US President Donald Trump’s announcement of sweeping tariffs on April 2 threw global trade turmoil into sharper relief, with the anticipated average effective US tariff rate reaching its highest level since 1909 at 22.5%. This led to a significant market response, with US stocks shedding $5.4 trillion in value and equities in Asia tumbling.
The news sent warning signs about American economic stability, with bond-market reactions hinting at broader fears. The IMF warned of significant risks to the global outlook, and Goldman Sachs pegged the odds of a US recession at 45%.
In response to the tariffs, China raised its tariffs on US imports by 145%, while other countries struggled to find anyone who stands to benefit from this burgeoning trade war. Markets remain unsettled amid alarming projections, driven by policy uncertainty and concerns over economic conditions.
The reactions abroad ranged from retaliation to attempted conciliation, with some countries pursuing a bit of both. The European Union paused its own tariffs applied in response to US levies on steel and aluminium, while nearing a free-trade agreement with India and subtly flagging a potential summit with leaders from Beijing this summer.
Central banks are keeping a watchful eye on the situation, with an interest-rate cut from the European Central Bank seeming imminent. However, analysts indicated that the poorest economies are likely to be hit hardest by the tariff wave, potentially causing lasting harm to US standing in the developing world.
As the global economy navigates this tumultuous period, it is essential to monitor developments and stay informed about key economic news and updates from around the world.
Source: https://www.weforum.org/stories/2025/04/us-trade-policy-turmoil-shakes-the-global-economy-and-other-key-economic-news-to-know