US Tariffs Spark Global Economic Tensions as Trump's 25% Car Tariff Threatens US Economy

Published on 4.2.25

  The recent escalation of trade tensions between the US and its major trading partners has sent shockwaves through global markets, with the S&P 500 futures falling 0.7% and Nasdaq futures losing 1.1%. The trigger for this downturn was President Trump's announcement that he plans to impose a 25% tariff on imported cars, which could significantly impact automaker stocks. This move has been met with concerns from major trading partners, including the European Union, which is preparing to retaliate with tariffs of its own. However, EU leaders are also considering offering concessions to President Trump in an effort to ease tensions and restore a "golden age" of American prosperity. The Congressional Budget Office estimates that the national debt will increase by $1 trillion between 2018 and 2020 due to these policies. Goldman Sachs analysts now see a 35% chance of a US recession, citing concerns over tariffs' impact on the economy and inflation. Economists warn that the US economy faces significant risks from tariffs, including a 40% chance of recession. The dollar eased against the yen as 10-year Treasury yields dropped to 4.208%, further indicating concerns over global growth slowing down. Investors are seeking safe havens in sovereign bonds, the Japanese yen, and gold, which hit an all-time high at $3,128.06 an ounce.

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