US-China Trade Tensions Escalate Global Instability with Tariffs Imposed by US Treasury Secretary Steven Mnuchin
Published on 5.21.25
The ongoing trade tensions between the US and China have significant implications for global economic stability. Despite a recent de-escalation in tensions, US Treasury Secretary Steven Mnuchin warned that maximum tariffs would be imposed if trade partners do not negotiate in good faith.
The effects of these tariffs are already being felt, with Asian shares declining due to mixed Chinese economic data and US tariffs affecting exports. JPMorgan economist Michael Feroli estimated that the current effective tariff rate is equivalent to a 1.2% tax rise on GDP, weighing on growth and consumer sentiment.
The International Monetary Fund has also warned of increasing external risks to global economies due to US tariff announcements and geopolitical tensions. The IMF notes that these risks could lead to a tightening in global financial conditions and commodity prices, affecting countries' already tight financial situations.
This highlights the interconnectedness of the global economy and the need for countries to work together to mitigate the effects of trade tensions.