It has been forty-seven days since the 47th US President sent the global economy into a turmoil. On April 2, Donald Trump announced his sweeping tariff hikes, regional trade recalibrations, on he what he called the 'liberation day' . Trump’s “economic nationalism” has reawakened tensions last seen during his first term only this time, the stakes appear even higher.
Trump's aggressive use of tariffs justified as "reciprocal" measures to correct unfair trade practices has rocked global supply chains, strained diplomatic ties, and rattled financial markets.
Tariff shock: What changed in just 47 days
On 'liberation day', Trump announced his sweeping tariffs while some countries faced a universal 10% tariff, others were subjected to higher import duties. Products from China faced a combined import duty of 104%, including reciprocal tariffs and a previously announced 20% duty.
Other nations affected included Vietnam with a 46% tariff, Taiwan at 32%, and India at 26%. South Korea and Japan are facing 25% and 24% tariffs, respectively, while countries like Australia, the United Kingdom, and Brazil face a baseline tariff of 10%.
However in a sudden shift on April 9, Trump announced he suspended his reciprocal tariffs for the next 90 days, setting a universal tariff rate of 10%, for all countries barring China.
The Asia-Pacific Economic Cooperation (APEC) this week warned that trade in the region is approaching stagnation. APEC’s report shows export growth plummeting from 5.7% in 2024 to just 0.4% this year. Imports are nearly flat. The group’s director, Carlos Kuriyama, said rising tariffs are fuelling a “loss of investor confidence” and weakening demand, with implications for jobs and GDP. APEC’s forecast for regional growth has dropped to 2.6% for 2025, down from 3.3% earlier projected.
The volatility has hit large and small businesses alike. Walmart, the world’s largest retailer, said last week it would be forced to raise prices due to tariff-related costs. Trump lashed out, posting online: “Between Walmart and China they should, as is said, ‘EAT THE TARIFFS,’ and not charge valued customers ANYTHING.”
Behind the scenes, Scott Bessent spoke with Walmart CEO Doug McMillon , who reportedly agreed to absorb some costs. “Walmart is, in fact, going to... eat some of the tariffs,” Bessent said in an interview, adding he had not pressured the company.
How the markets have reacted:
S&P 500
The S&P 500 initially plummeted by up to 15% following the tariff declaration. However, a subsequent 90-day pause in tariffs and a provisional US-China trade agreement spurred a robust rebound. By mid-May, the index had not only recouped its losses but also posted a year-to-date gain of 0.1% . Despite this recovery, analysts caution that persistent high valuations and underlying economic uncertainties could pose risks to sustained growth .
BSE Sensex
After the tariff announcement BSE Sensex faced headwinds, however India's stock market became the first among global economies to recover from Trump's trade shock. The intensifying US-China trade war strengthened India’s appeal as an attractive alternative for global manufacturing.
Nikkei 225
Japan's Nikkei 225 index has experienced notable declines, dropping from a high of 34,609 on 10 April to approximately 33,740 in early May. This represents a decrease of about 2.5%, reflecting investor apprehension over global trade disputes and their potential impact on Japan's export-driven economy .
‘60% of firms expect negative impacts’
As per the Allianz Trade Global Survey 2025, global exporters are grappling with serious uncertainty following the US’s new trade war.
Nearly 60% of firms expect negative impacts, with just under half forecasting positive export growth, down from 80% pre-announcement. Turnover expectations have plummeted, and firms in Germany, Italy, and China are shifting strategies, focusing either on cost-cutting or diversification.
One-third of companies have already found new export or supply markets, with two-thirds planning to follow suit. Supply chain rerouting is accelerating, especially as tariffs remain high despite a new US-China trade deal. American firms are favouring Latin America and Western Europe, while Chinese companies are pivoting towards Asia-Pacific. Payment delays are rising, with fewer firms being paid within 30 days and longer terms hitting smaller exporters hardest.
Nearly half of firms fear increased non-payment risk. As a result, most are raising prices or passing tariff costs to suppliers. Despite some easing measures, trade tensions remain volatile, and derisking is expected to continue. European and Latin American markets are gaining ground as exporters retreat from direct US-China engagement, prompting a global reshuffle in supply chains and export strategies.
Global reactions: Uncertainty, retaliation and limited gains
In South Korea, where APEC ministers are currently meeting, officials are trying to stabilise trade cooperation amid the turbulence. Despite recent talks between US and Chinese trade envoys, there’s little optimism for a return to pre-tariff normalcy. “This is positive, but this is not taking us to the situation before April,” Kuriyama said, referencing Trump’s aggressive new trade moves.
Many nations are now pivoting toward regional deals in response to the United States' retreat from globalism. “This is the rate for Central America. This is the rate for this part of Africa,” Bessent said, describing the administration’s regional strategy.
Yet experts say such fragmentation only exacerbates instability. “Uncertainty is dangerous,” Kuriyama warned, as quoted by AFP. “We need to make sure policies are steady... and not temporary.”
Domestically, the White House insists its plan is delivering results. A spokesman told Axios the administration is “slashing costly regulations, lowering energy prices, cutting Joe Biden’s runaway spending that sparked inflation,” and attracting historic investment in critical sectors. A Wall Street Journal piece cited by the White House claimed some small manufacturers are seeing an uptick in business thanks to protectionist measures.
But critics argue these benefits are sparse and do not outweigh the harm. Heidi Shierholz of the Economic Policy Institute says there’s no broad constituency demanding tariffs at this scale. Former Treasury Secretary Larry Summers was more blunt, telling Axios that the measures are likely “to create fewer good-paying jobs”.
Workers, consumers feel the squeeze
For workers, the reality is bleak. Thousands of federal employees have been laid off, unions are under pressure, and minimum wages for contractors have been cut. Regulatory agencies protecting labour rights have also been weakened. In the private sector, management has grown emboldened, with fewer protections for employees and more volatility in hiring.
Consumers, too, are beginning to feel the squeeze. Higher production costs due to tariffs are pushing up prices. Even with inflation easing, those savings are quickly offset by rising retail prices and economic uncertainty.
Trump's aggressive use of tariffs justified as "reciprocal" measures to correct unfair trade practices has rocked global supply chains, strained diplomatic ties, and rattled financial markets.
Tariff shock: What changed in just 47 days
On 'liberation day', Trump announced his sweeping tariffs while some countries faced a universal 10% tariff, others were subjected to higher import duties. Products from China faced a combined import duty of 104%, including reciprocal tariffs and a previously announced 20% duty.
Other nations affected included Vietnam with a 46% tariff, Taiwan at 32%, and India at 26%. South Korea and Japan are facing 25% and 24% tariffs, respectively, while countries like Australia, the United Kingdom, and Brazil face a baseline tariff of 10%.
However in a sudden shift on April 9, Trump announced he suspended his reciprocal tariffs for the next 90 days, setting a universal tariff rate of 10%, for all countries barring China.
The Asia-Pacific Economic Cooperation (APEC) this week warned that trade in the region is approaching stagnation. APEC’s report shows export growth plummeting from 5.7% in 2024 to just 0.4% this year. Imports are nearly flat. The group’s director, Carlos Kuriyama, said rising tariffs are fuelling a “loss of investor confidence” and weakening demand, with implications for jobs and GDP. APEC’s forecast for regional growth has dropped to 2.6% for 2025, down from 3.3% earlier projected.
The volatility has hit large and small businesses alike. Walmart, the world’s largest retailer, said last week it would be forced to raise prices due to tariff-related costs. Trump lashed out, posting online: “Between Walmart and China they should, as is said, ‘EAT THE TARIFFS,’ and not charge valued customers ANYTHING.”
Behind the scenes, Scott Bessent spoke with Walmart CEO Doug McMillon , who reportedly agreed to absorb some costs. “Walmart is, in fact, going to... eat some of the tariffs,” Bessent said in an interview, adding he had not pressured the company.
How the markets have reacted:
S&P 500
The S&P 500 initially plummeted by up to 15% following the tariff declaration. However, a subsequent 90-day pause in tariffs and a provisional US-China trade agreement spurred a robust rebound. By mid-May, the index had not only recouped its losses but also posted a year-to-date gain of 0.1% . Despite this recovery, analysts caution that persistent high valuations and underlying economic uncertainties could pose risks to sustained growth .
BSE Sensex
After the tariff announcement BSE Sensex faced headwinds, however India's stock market became the first among global economies to recover from Trump's trade shock. The intensifying US-China trade war strengthened India’s appeal as an attractive alternative for global manufacturing.
Nikkei 225
Japan's Nikkei 225 index has experienced notable declines, dropping from a high of 34,609 on 10 April to approximately 33,740 in early May. This represents a decrease of about 2.5%, reflecting investor apprehension over global trade disputes and their potential impact on Japan's export-driven economy .
‘60% of firms expect negative impacts’
As per the Allianz Trade Global Survey 2025, global exporters are grappling with serious uncertainty following the US’s new trade war.
Nearly 60% of firms expect negative impacts, with just under half forecasting positive export growth, down from 80% pre-announcement. Turnover expectations have plummeted, and firms in Germany, Italy, and China are shifting strategies, focusing either on cost-cutting or diversification.
One-third of companies have already found new export or supply markets, with two-thirds planning to follow suit. Supply chain rerouting is accelerating, especially as tariffs remain high despite a new US-China trade deal. American firms are favouring Latin America and Western Europe, while Chinese companies are pivoting towards Asia-Pacific. Payment delays are rising, with fewer firms being paid within 30 days and longer terms hitting smaller exporters hardest.
Nearly half of firms fear increased non-payment risk. As a result, most are raising prices or passing tariff costs to suppliers. Despite some easing measures, trade tensions remain volatile, and derisking is expected to continue. European and Latin American markets are gaining ground as exporters retreat from direct US-China engagement, prompting a global reshuffle in supply chains and export strategies.
Global reactions: Uncertainty, retaliation and limited gains
In South Korea, where APEC ministers are currently meeting, officials are trying to stabilise trade cooperation amid the turbulence. Despite recent talks between US and Chinese trade envoys, there’s little optimism for a return to pre-tariff normalcy. “This is positive, but this is not taking us to the situation before April,” Kuriyama said, referencing Trump’s aggressive new trade moves.
Many nations are now pivoting toward regional deals in response to the United States' retreat from globalism. “This is the rate for Central America. This is the rate for this part of Africa,” Bessent said, describing the administration’s regional strategy.
Yet experts say such fragmentation only exacerbates instability. “Uncertainty is dangerous,” Kuriyama warned, as quoted by AFP. “We need to make sure policies are steady... and not temporary.”
Domestically, the White House insists its plan is delivering results. A spokesman told Axios the administration is “slashing costly regulations, lowering energy prices, cutting Joe Biden’s runaway spending that sparked inflation,” and attracting historic investment in critical sectors. A Wall Street Journal piece cited by the White House claimed some small manufacturers are seeing an uptick in business thanks to protectionist measures.
But critics argue these benefits are sparse and do not outweigh the harm. Heidi Shierholz of the Economic Policy Institute says there’s no broad constituency demanding tariffs at this scale. Former Treasury Secretary Larry Summers was more blunt, telling Axios that the measures are likely “to create fewer good-paying jobs”.
Workers, consumers feel the squeeze
For workers, the reality is bleak. Thousands of federal employees have been laid off, unions are under pressure, and minimum wages for contractors have been cut. Regulatory agencies protecting labour rights have also been weakened. In the private sector, management has grown emboldened, with fewer protections for employees and more volatility in hiring.
Consumers, too, are beginning to feel the squeeze. Higher production costs due to tariffs are pushing up prices. Even with inflation easing, those savings are quickly offset by rising retail prices and economic uncertainty.
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