US-China Trade Tensions Escalate Globally

Published on 4.18.25

  The ongoing trade tensions between the US and China have significant implications for global economic stability, and the livelihoods of millions of people worldwide. The potential loss of trade between the two nations could lead to factory shutdowns, shipping disruptions, price drops for key commodities, and increased unemployment. In a recent development, Ray Dalio, founder of Bridgewater Associates, suggested that the US and China may negotiate a deal to strengthen the yuan in exchange for easing tariffs. This proposal comes after a meeting with senior Chinese leaders, indicating a willingness to engage in diplomatic efforts to mitigate the economic fallout. China's economy is heavily reliant on exports to the US, with a 14.7% share in 2024, making it vulnerable to significant declines in trade. The International Monetary Fund (IMF) has warned that US tariffs pose a substantial risk to the global outlook, while China plans to impose export controls on rare earths used in high-tech products. Economists predict that the tariffs could lead to weaker economic growth and higher inflation, potentially knocking down US GDP by 2 percentage points this year. The Chinese government has also imposed sanctions or export controls on 27 additional US companies and filed a lawsuit with the WTO over tariffs.

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