The 2025 US-China trade war
On April 2, 2025, President Donald Trump declared a national economic emergency and announced sweeping new import tariffs.
Dubbed “Liberation Day,” the policy set a baseline 10% tariff on all foreign goods, with a massive 145% rate on products from China. The move was framed as a way to fix long-standing trade imbalances and protect national industries.
China responded almost immediately. Tariffs on US imports jumped to 125%, and restrictions were introduced on the export of rare earth elements, materials essential to global manufacturing. Within days, trade between the world’s two largest economies had slowed dramatically.
The markets didn’t take it well. The S&P 500 dropped 15% in under a week. The Nasdaq was down nearly 20% for the year by April 7. Investors were rattled by the scale of the escalation and the potential knock-on effects on global growth.
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