Palm Beach, Florida / Beijing / Washington – The intensifying trade dispute between the United States and China has taken a sharp turn, sparking renewed fears of a global economic slowdown. On Friday, China imposed a steep 34% tariff on a range of American imports, retaliating against U.S. measures and sending global stock markets into a downward spiral.
In response to ongoing U.S. tariff hikes, China also added 11 American companies to its “unreliable entity” list—an economic blacklist targeting firms involved in arms deals with Taiwan and other activities deemed contrary to Beijing’s interests.
Alongside the tariffs, China has tightened export controls on strategic materials, including rare earth elements crucial to tech manufacturing. Meanwhile, the U.S. administration, under President Donald Trump, has held its ground, signaling no plans to de-escalate.
Market analysts warn that the deepening rift between the world’s two largest economies could have long-term implications. J.P. Morgan has raised the probability of a global recession by year-end to 60%, up from its earlier estimate of 40%.
The financial fallout was swift. Wall Street tumbled, with the Nasdaq shedding 3.69%, driven largely by losses in tech stocks like Apple (-4.7%) and Nvidia (-3.4%). This downturn pushed the Nasdaq into bear market territory, falling more than 20% from its peak in December.
Federal Reserve Chair Jerome Powell acknowledged the seriousness of the tariffs, stating they pose risks of higher inflation and slowed growth. While he avoided direct commentary on market volatility, he noted the broader economic uncertainty these trade policies are causing.
Despite strong U.S. job growth in March—highlighted by a Labor Department report—experts caution that increased tariffs could soon dampen business sentiment and labor market strength.
President Trump, addressing the situation on social media, remained optimistic, framing the current conditions as an ideal opportunity for investors. He also hinted at potential negotiations involving TikTok and Chinese tariffs but provided no specific plans for discussions with President Xi Jinping.
Outside the U.S., ripple effects are being felt globally. Canada reported a rise in unemployment, citing trade-related disruptions. In Japan, Prime Minister Shigeru Ishiba described the economic strain as a “national crisis,” while banking stocks suffered their worst week in years.
Europe is also grappling with how to react. While some EU members call for retaliation, others advocate for a cautious approach to avoid worsening the conflict. French President Emmanuel Macron urged a halt to U.S. investments, while his finance minister warned against knee-jerk reactions.
The tariffs are hitting consumers too. Analysts estimate that U.S. households could bear additional costs of up to $1,000 annually. Electronics and tech products are particularly affected, with projections suggesting premium smartphones like the iPhone could exceed $2,300 if companies pass costs down.
While Washington insists these tariffs are a fair counter to trade imbalances, critics argue the policy is destabilizing markets rather than reviving domestic manufacturing.
