Hello MarketShalians, Welcome to the World Economy Actions Dose at MarketShala, I hope you are able to keep yourself composed in this global economic storm. At the present time, a saying which is very close to my heart is proving to be true – “I know everything, but I do not know what I do not know”. The sooner you understand this statement, the easier life will become. Everyone, big and small, is busy making predictions, but the markets seem to be expressing the reality in a different way. So let’s take a look at what is new and fresh in the financial world.
Table of Contents
Recession in the U.S.
BlackRock’s Larry Fink says that the U.S. is quite close to entering a recession. This is scary news, then why has there been no major negative impact in the capital markets in the last 2-3 days? I wonder who has no clue. On Wednesday too, economists at Goldman Sachs had predicted that the U.S. would enter a recession. And shortly after, Trump made a big decision and rolled out many of the tariffs and this led to a huge up-move in the capital markets.
U.S. China Conflict
Here the old rivalry between China and the U.S. has now come out in the open and if seen, the real tariff war is now going on between the U.S. and China, other countries seem to be getting some relief due to this. But the question arises whether this relief is temporary or permanent? I believe that if everything does not go well between the U.S. and China, it will have a huge negative impact on the economy of the whole world.
Continuously U.S. and amidst China’s actions of imposing tariffs on each other, latest China has said that it will implement a tariff of 125 percent on US goods and this is like a war between the two biggest economies of the world. China’s finance ministry has said that this increase will come into effect from April 12, 2025. The reason behind this move of China is being considered to be the tension due to shipping disruption in the peaceful ocean between the two countries.
Apple has hired a chartered cargo flight to bring 1.5 million devices to America and it has taken this step after its decision to increase manufacturing in America. It is believed that after the imposition of heavy tariffs on China, the price of iPhones may increase in the U.S. China is a big manufacturing hub for the Apple Company.
Meanwhile, news is coming from China’s foreign ministry that Chinese President Xi Jinping is going to visit Vietnam, Malaysia and Cambodia next week and this is also being linked to the political turmoil arising out of the trade war.
U.S. vs China Trade War
Trump has certainly imposed a 90-day hold on the tariffs he has imposed, but the concerns about the worldwide tariffs have not reduced. An atmosphere of uncertainty has been created, as it is a bit difficult to trust the person behind all this that a solution will be found in the next 90 days.
The White House said Thursday that the total tariffs imposed on China during Trump’s second term now amount to 145%. The gloves are off. The next chapter of the U.S.- China rift has begun. The pain will be felt everywhere. The world’s two largest economic powers are locked in a battle that will leave no one untouched and risks damaging the global economy. They may be called back eventually, but already, there are signs that a portion of the $582 billion in goods trade between the two countries has ground to a halt. American factories are canceling orders and some Chinese manufacturers are sending workers on temporary leave.
Currency
The dollar is witnessing severe weakness due to the tariffs imposed by China. Gold has shown new strength this week after its recent fall, which also indicates that despite a recovery in the stock market, all is not well and Gold is benefiting from this as a safe haven asset class and it seems to be trading at new life highs.
Japan’s yen strengthened against other G-10 and Asian currencies in early trade. The Japanese yen (JPY) and the Swiss franc (CHF) appear to be the only safe havens in the forex market. USD/JPY fell 0.9% to 143.19.
Conclusion and disclaimer
The content on MarkShala.com is intended for educational and informational purposes only. We specialize in writing blogs on financial planning, investment strategies, economic trends, and related topics. While we strive to provide accurate and reliable information, the content should not be taken as professional financial, investment, or legal advice.
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