TLDR
- Trump claims China has reached out “a number of times” for dialogue amid escalating tariff tensions
- Markets showed mixed performance with S&P 500 rising 0.52% while Dow Jones fell 0.89% last week
- Bitcoin reached $87,236, crossing the $87,000 threshold while other cryptocurrencies showed uneven returns
- China warned it will retaliate against countries making deals with US that harm Beijing’s interests
- US reportedly plans to pressure other nations to restrict China trade in exchange for US tariff exemptions
The ongoing trade war between the United States and China reached new heights last week, with both nations imposing steep tariffs on each other’s goods. Meanwhile, Bitcoin surged past $87,000 as markets responded to the growing uncertainty.
President Donald Trump stated that China has sought dialogue “a number of times” regarding the tariff standoff. “Yeah, we’re talking to China. I would say they have reached out a number of times,” Trump told reporters from the Oval Office, even hinting that Chinese President Xi Jinping had personally reached out to him.
Trump defended his tariff policy on Truth Social, stating, “The businessmen who criticize tariffs are bad at business, but really bad at politics.” He added, “I am the greatest friend that American capitalism has ever had… The golden rule of negotiating and success: he who has the gold makes the rules.”
The US President has imposed taxes of up to 145% on Chinese imports. His administration stated last week that when combined with existing tariffs, levies on some Chinese goods could reach 245%.
Markets Respond with Volatility
Financial markets exhibited mixed trends in response to the escalating trade tensions. The S&P 500 rose 0.52% over five trading days, while the Dow Jones Industrial Average fell 0.89%. The Nasdaq composite slipped 0.44%, and the Russell 2000 gained 2.9% during the same period.
Crypto markets also showed varied performance. Bitcoin remained relatively steady compared to other cryptocurrencies, with BTC posting gains while ETH, ADA, and XRP declined. By Sunday evening, Bitcoin moved past the $87,000 threshold, reaching $87,236.
Gold, often seen as a traditional safe haven during economic uncertainty, ended the week about 3.8% higher against the US dollar. This suggests investors may be seeking refuge from the trade war’s potential impact on traditional markets.
US equity futures showed a modest retreat on Sunday evening ahead of Monday’s market open. Contracts tied to the Dow fell by 0.5%, while futures linked to both the Nasdaq composite and the S&P 500 also dipped 0.5%.
International Ripple Effects
China has responded forcefully to US trade actions, imposing a 125% tax on American products and vowing to “fight to the end.” The Chinese Commerce Ministry also issued a warning to other nations considering deals with the US that might hurt Beijing’s interests.
“Appeasement cannot bring peace, and compromise cannot earn one respect,” a Chinese Commerce Ministry spokesperson stated. “China firmly opposes any party reaching a deal at the expense of China’s interests. If this happens, China will never accept it and will resolutely take countermeasures.”
Reports suggest the US plans to use tariff negotiations to pressure dozens of countries into imposing new barriers on trade with China. This strategy threatens to expand the trade war beyond the US and China.
Trump has claimed that more than 70 countries have reached out to start negotiations since the tariffs were announced. Japan began talks last week when its top tariff negotiator met with Trump in Washington DC. South Korea is set to begin trade discussions with the US this week.
US Vice President JD Vance is expected to meet India’s Prime Minister Narendra Modi during a visit to the country. India faces a tariff rate of 26% if unable to reach a trade deal with the Trump administration. Vance also mentioned there was a “good chance” of a trade deal with the UK.
Critics of Trump’s tariff policies argue they will increase costs for businesses and consumers, threaten jobs, and reduce wages. Some expect the measures to compress the US economy and household incomes.
Trump contends that tariffs protect US jobs, boost domestic manufacturing, strengthen national security, and generate government revenue. He believes they encourage consumers to purchase American-made goods and reduce dependence on foreign imports.
The ongoing trade tensions continue to create uncertainty in global markets, with investors closely watching Trump’s next moves regarding international trade policies.
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