As of May 12, 2025, here’s an update on the global trade war situation:
1. U.S.–China Trade Tensions
Tariffs: The U.S. has recently reimposed or increased tariffs on several Chinese tech and electric vehicle (EV) imports, citing unfair trade practices and national security concerns.
China's Response: China is considering retaliatory tariffs and restrictions on U.S. agricultural imports and rare earth exports.
Impact: Investors are cautious, with concerns about global supply chain disruptions and inflation pressures.
2. Europe–China Trade Relations
EU Probe: The European Union is investigating Chinese subsidies for EVs and green technologies.
China's Reaction: Beijing has warned of countermeasures, which could affect luxury European car and wine exports.
3. India’s Role
Neutral but Strategic: India is leveraging the situation to boost its manufacturing exports and attract foreign investments as an alternative supply chain hub.
Tariff Adjustments: India has increased some tariffs to protect domestic industries while negotiating new trade deals with the U.S. and EU.
Market Reactions
Commodities: Prices of key raw materials (like rare earths and lithium) are volatile.
Stocks: Global equities are mixed; tech and auto sectors are particularly sensitive.
Currency Impact: The yuan is under pressure; the U.S. dollar is relatively strong.