The US and China have entered a full-scale trade war after President Donald Trump raised tariffs on Chinese imports to 125%, prompting swift retaliation from Beijing.
Analysts warn the conflict will have far-reaching consequences for global markets, businesses, and investors.
“The escalation is sharp and unmistakable,” said Nigel Green, CEO of deVere Group.
Trump’s decision came just hours after China imposed an additional 50% tariff on U.S. goods, adding to the 34% tariffs it had previously announced.
“No longer a war of words, this is now a war of action—and the effects will ripple through every major asset class, industry, and economy,” said Green.
Green emphasized that this period will be marked by “profound volatility, profound opportunity, and profound risk” for investors. “The myth that trade wars are ‘easy to win’ has been shattered. When the world’s two largest economies go head-to-head, there are no easy winners—only shifting damage.”
China remains major concern
Daniel Ives, managing director at Wedbush Securities, said the latest developments provide some relief for US tech stocks but cautioned that China remains a major concern.
“Now we would expect massive negotiations across the board over the coming months including China being front and center as the biggest wild card,” Ives said. “For tech stocks this was much-needed relief and pulls stocks and the market from the edge of the cliff, although China remains the biggest X variable related to Apple and the broader supply chain.”
As tensions persist, analysts expect continued market volatility. “Sharp rallies on the slightest hint of diplomacy will be followed by brutal sell-offs when hostilities deepen,” Green warned. “The US-China trade war is no longer a risk—it’s a reality. And those who adapt fastest will not only protect their wealth—they will find opportunities others miss.”
Art of the Deal?
Trump also announced a 90-day pause in the full application of tariffs for non-retaliating countries, a decision seen as a response to economic pressure.
White House press secretary Karoline Leavitt defended the strategy, saying Trump’s approach reflects his negotiating style.
“Many of you in the media clearly missed the ‘Art of the Deal,’” Leavitt told reporters Wednesday, referencing Trump’s 1987 book.
“You clearly failed to see what President Trump is doing here. You tried to say that the rest of the world would be moved closer to China, when in fact, we’ve seen the opposite effect — the entire world is calling the United States of America, not China, because they need our markets.”