The world’s economic fate is in jeopardy as two major economic powers, the United States and China, engage in a trade war.
- Global Impact: This conflict isn’t just between the two giants; it involves 180 countries. The U.S. President declared a trade war on 180 nations, imposing a general 10% tariff on imports from all trading partners.
- Escalation: Additional arbitrage rates of up to 30% may be applied in specific cases starting April 9. The U.S. also threatens an extra 50% tariff on China if it doesn’t rescind its 34% retaliatory tariffs by the same date.
- China’s Response: In response to the U.S. tariffs, China announced a 34% tariff on U.S. goods and restricted exports of strategic elements like rare earths essential for advanced tech production.
- Market Consequences: Trump’s threats have led to global market turmoil, with Wall Street losing nearly $10 trillion since his presidency began. U.S. companies backed by key supporters during his inauguration are suffering significant losses due to production shifts to Asian markets affected by Trump’s tariff policies.
- Global Disruption: If the U.S. President achieves his goal, a global shift from 30 years of integrated production could occur, possibly triggering another severe disruption in worldwide supply chains with unpredictable outcomes. A global recession might ensue.
Mexico’s Economic Outlook Altered
In Mexico, Citi’s economists have revised their 2025 growth forecast from 0.6% to 0.3%, due to the productive slowdown, market volatility triggered by U.S. tariffs, and potential decrease in trade.
