- China hiked tariffs on U.S. goods to 84%, and the EU imposed 25% duties, intensifying the global trade war.
- Markets tumbled as recession fears mounted, with oil hitting four-year lows and the S&P 500 seeing historic losses.
- Trump defended his tariff strategy as “tailored deals” and claimed countries are begging to negotiate, despite rising global backlash.
So, here we go again. Things just escalated in the global trade arena, and not in a good way. On Wednesday, both China and the European Union rolled out fresh trade barriers aimed at U.S. goods—firing back at President Trump’s hefty new tariffs that kicked in the same day.
China didn’t hold back. It raised tariffs on American imports to 84%, up from 34%, barely hours after the U.S. began enforcing its new 104% duty on Chinese products. That’s… steep. And it’s clear neither side is backing down anytime soon.
Europe Follows Suit, Allies Pushed to React
The EU responded with its own punch—a 25% tariff on a wide range of U.S. products, saying more measures are in the pipeline. Meanwhile, U.S. allies like Canada and Japan are getting drawn deeper into this mess. Canada’s countermeasures took effect the same day, and Japan says it’ll coordinate with others to try and keep global finance from unraveling completely.
Oh, and let’s not forget, Donald Trump’s tariffs didn’t stop at just China or the EU—86 countries are now hit with new duties. Everyone from Taiwan to Madagascar is now tangled up in what’s quickly becoming a full-scale disruption of decades-old global trade norms.
Before Trump came into office, U.S. tariffs averaged around 2.5%. Now? They’re hovering over 20%, depending on the source. That’s not a small bump.
Markets Stagger, Oil Nosedives
Wall Street took a beating last week, losing trillions in equity, and things aren’t much better this week. Global stock markets slid again, oil prices dropped to four-year lows, and even U.S. Treasuries—the usual safe haven—saw a sell-off. Investors are spooked, plain and simple.
JPMorgan’s Jamie Dimon didn’t sugarcoat it. He warned the tariffs could push the U.S. into a recession, leading to a wave of borrower defaults. Not exactly the calm before the storm—this might just be the storm.
Mixed Messages from the White House
Trump, for his part, doesn’t seem all that concerned. He posted on social media, in his usual punchy tone:
“BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before!”
Despite the chaos, he claims the tariffs are rebuilding the country’s industrial base. And while he calls them “permanent,” he’s also bragged that they’ve got other countries scrambling to negotiate.
Some countries are talking. Trump said he’s already spoken to Japan and South Korea, and Vietnam’s sending a team to D.C. He also… rather colorfully… said:
“These countries are calling us up, kissing my ass.”
So yeah, diplomacy.
Trouble at Home Too
Back in the U.S., stocks managed to claw back a little ground on Wednesday—maybe bargain hunting, maybe false hope. But let’s not get ahead of ourselves. The S&P 500 is still down hard since April 2, when all this started.
Economists are warning that regular Americans could soon feel the pinch. Prices on everyday goods may jump by thousands per year, which could be a serious political liability for a president promising to cut costs.
A Reuters/Ipsos poll found that 3 out of 4 Americans expect higher prices. Some businesses are already planning hikes, though others say the impact won’t hit until the next shipment cycle.
Even Walmart, the biggest importer of containerized goods in the U.S., says it’s sticking to its forecast but didn’t offer much detail on how long it can keep prices low.
Political Reactions, From All Sides
Democrats? They’re still sorting through how to respond. Michigan Gov. Gretchen Whitmer, a possible future presidential contender, offered a measured take:
“Tariffs need to be used like a scalpel, not a hammer.”
But with Washington gridlocked and the administration holding the reins, there’s no clear plan to change course—at least not yet.
What’s Next?
More tariffs could be on the way. Trump’s floated the idea of slapping major duties on pharmaceutical imports, and that sent drug stocks tumbling. China says it’s got “the determination and means” to keep the fight going. And they’re proving it—18 more U.S. companies just got hit with restrictions, many of them in defense.
Meanwhile, China’s central bank is quietly trying to stop the yuan from dropping too fast, even as pressure builds.
Bottom line? This trade war just went full global, and the fallout is only starting to unfold.
