U.S.-China trade war: A spiral of tariffs shaking global markets

In the week of April 8, 2025, tensions between the United States and China reached a dramatic new peak.

President Donald Trump’s administration threatened to levy an additional 50 percent tariff on all Chinese goods, bringing total U.S. duties on Beijing to a staggering 104 percent. But the real figure, considering also the already existing duties on steel and aluminum, is even more alarming: 129% total tariffs on Chinese imports.

This move represents the latest chapter in a long sequence of reciprocal punitive measures that first saw the imposition of a 20% tariff on all Chinese products, then an additional 25% on steel and aluminum, followed by a 34% by China in response, and now this potential additional 50% from the US.

The deadline to avoid the new duties was set for midnight on April 9 (CST time). According to Trump, if China had “extended its hand” to negotiate, America would have been “generous.” Failing that, however, the president firmly stated that he will “do whatever it takes to protect American interests.”

China’s strategy: An eye for an eye, a duty for a duty

Beijing, however, chose not to bend. On the contrary, it has responded with what Chinese media call a “blow-by-blow strategy,” reiterating its willingness to respond to each threat with equal force.

China believes that this trade war will, in the medium term, hurt the U.S. economy more than its own. For this reason, it is adopting a “wait-and-respond” policy, monitoring the situation and acting firmly on every U.S. move.

The Chinese Ministry of Commerce said, “The U.S. threat to further increase tariffs is mistake after mistake.”

Belligerent tones were not long in coming from the White House either: spokeswoman Karoline Leavitt said that “it was a mistake for China to react with tariffs. When America is hit, the president responds by hitting back harder.”

Who really pays the price for the trade war?

As the U.S. and China battle it out over tariffs, it is businesses around the world – American, Chinese, European and Asian – that are paying the real price.

Analysts point out that previous tariff increases sought by Trump have already significantly eroded exporters‘ profit margins. Any further increase is likely to increase Washington’s negotiating aggressiveness, with the goal of excluding China from the world’s largest consumer market.

However, there are also those who propose a radical idea: some analysts suggest that China could suspend exports to the United States altogether, thus avoiding any impact, even if tariffs reach exorbitant levels.

Asian stock markets and metals sector plummet: Market reaction to new U.S. threat

The announcement of the 50 percent additional duty by the United States triggered a wave of selling in Asian markets, marking a black day for the region’s stock markets. Investors, worried about the prospect of an unresolved escalation of the trade war, began to retreat from stocks related to international trade and manufacturing.

• In Japan, the Nikkei 225 index closed down nearly 4 percent, highlighting the Japanese market’s sensitivity to tensions between the world’s two largest economies;
• In Taiwan, the benchmark list slumped 5.8 percent, with particular pressure on technology and industrial stocks;
• In Hong Kong, the Hang Seng Index managed to recover some of its initial losses, but still closed down 0.4 percent;
• In South Korea, the Kospi 200 gave up 1.8 percent, confirming strongly bearish regional sentiment.

India and the metals sector: Black week for aluminum

In India, the markets’ reaction was equally harsh. The metals sector experienced one of its worst weeks in a year:

• The Nifty Metal index lost 2.5 percent on the day of April 8 alone, with an overall drop of more than 8 percent on a weekly basis;
• The three major aluminum companies-Hindalco, NALCO, and Vedanta-declined between 1 percent and 2 percent from the previous day.

The domestic aluminum price fell 1.22 percent, closing at 231.3 rupees per kg, equivalent to about $2.67 per kg. This decline is related to the increase in Chinese consumption in anticipation of the new duties coming into effect, resulting in lower stocks in LME warehouses.

A case in point is the Malaysian port of Port Klang, where there has been a sharp decline in stocks destined for Chinese exports. This led to a reduction in LME stocks of 2,175 tons, bringing the total to 452,525 tons.

Europe and the U.S.: Contagion spreads to Western markets

European financial markets also suffered the domino effect of U.S.-China tensions. Stock exchanges in London, Frankfurt, and Paris opened lower, mirroring the negative mood in Asian exchanges. In particular:

• The British FTSE 100 came under pressure from mining stocks;
• The German DAX, already weakened by negative industrial production data, saw further selling in cyclical sectors.

U.S. futures, initially positive, also veered into negative territory:

• S&P 500 expected down 0.5 percent;
• Nasdaq expected at -0.2 percent;
• Dow Jones Industrial Average estimated down 0.7 percent

Chinese counter-trend: Rising markets and government support

Surprisingly, the only market to close the day in positive territory was the Chinese market. The Shanghai and Shenzhen stock exchanges rose, reflecting domestic markets’ confidence in the Chinese government’s ability to handle the crisis.

• The Shanghai SSE Composite index closed up 1.1 per cent;
• The Shenzhen SE Composite gained a solid 2.2 per cent.

According to official sources, Beijing is set to deploy new fiscal and monetary stimulus measures to offset the impact of tariffs and support exporting companies.

Future Scenarios: What Prospects for the Global Economy and Industrial Metals? Long-term conflict or negotiations at the doorstep?

The trade war between the United States and China, now extended to almost all commodity categories, seems destined to last.

Trump’s strategy is based on a logic of maximum pressure, with the declared aim of reducing the trade deficit and bringing supply chains back to American territory. However, this policy clashes with the reality of an interconnected globalisation, where any interruption to supply chains generates systemic impacts.

On the other hand, China relies on internal resilience and diversification of outlet markets, strengthening trade ties with South-East Asia, Latin America and Africa. A negotiation is not ruled out, but at the moment both countries seem more focused on consolidating their positions than ceding ground.

Direct implications for industrial commodities

The tariff war has already had a tangible impact on the prices and balances of major industrial commodities. Here is a concise overview of the current consequences and possible developments:

• Aluminium: As already mentioned, it is among the most exposed metals, both for structural reasons (high Chinese production) and for direct involvement in US duties. The coming weeks could see a new wave of volatility, especially if China reduces exports or the dollar strengthens further;
• Copper: The red metal is suffering from the global manufacturing slowdown and recessionary fears. However, it remains crucial for the energy transition and electric mobility. A trade agreement could revive prices quickly, but until then demand may remain weak, especially in Europe and the US;
• Zinc: Penalised by the Chinese construction crisis, it could remain under pressure, although production disruptions in some exporting countries could provide temporary price support;
• Nickel: The current decline is linked to an oversupply from Indonesia, but the metal remains strategic for electric vehicle batteries. If China decides to limit technology exports in retaliation, nickel could see a sharp rebound;
• Lead: In a downtrend, it reflects the structural decline in demand for lead-acid batteries. However, it remains exposed to volatility in the automotive sector, which is among the most sensitive to trade wars;
• Tin: The only metal on the rise, it benefits from the supply crisis and its importance in electronics. As long as supplies from Myanmar and the DRC remain unstable, prices will remain high.

Global economic outlook and systemic risk

The escalating trade war is already slowing down global economic activity. The effects are propagating through several channels:

• Imported inflation in developed countries, due to higher prices of goods subject to tariffs;
• Investment slowdown due to political and financial uncertainty;
• Instability in emerging markets, often dependent on trade with China and the US;
• Falling confidence among both businesses and consumers, especially in Europe.

Central banks now find themselves in a delicate balance between containing inflation and supporting growth, while investors seek shelter in safe haven assets, moving capital away from cyclical sectors such as industrial metals.

Conclusion: The tariff war as a geopolitical watershed

The current crisis goes far beyond the commercial sphere. It marks a shift in the global economic order, where the conflict between the two superpowers involves not only goods, but also technology, energy, security and strategic supplies.

In this context, non-ferrous metals represent a litmus test of global tensions. Their price fluctuations reflect not only physical supply and demand, but also fears, expectations and geopolitical strategies.

The world looks to Washington and Beijing, hoping for a diplomatic opening. But until then, stock markets will remain nervous, prices unstable, and companies will have to learn to navigate a new global trade order.