It’s the end of what can only be called an incredibly tumultuous week for markets (not just in the US, but worldwide).
The S&P 500 ended the day up 1.8%. The Nasdaq jumped 2%. The Dow gained 1.6%. After days of erratic swings, the closing bell brought a sense of relief.
End of Day – April 11, 2025
End of Day – April 11, 2025
End of Day – April 11, 2025
But that rally didn’t erase the bruises.
What rattled markets this time?
The chaos all started when US President Donald Trump announced a sweeping new tariff regime. Markets plunged in response and global investors were scrambling to reassess exposure. By midweek, he hit pause (at least partially) granting a 90-day delay (except China, which faced increased tariffs in response to their own retaliatory tariffs on US goods).
The market rebounded somewhat, but the whiplash didn’t fade…
However, Beijing answered again on Friday with a sharp escalation of its own, hiking import duties on American goods from 84 percent to 125%.
That wasn’t all. China also moved to restrict exports of seven key rare earth materials, abruptly halting shipments. The licenses required to resume exports could take months. That has set off alarm bells across sectors that rely on rare earths, from defense contractors to electric vehicle makers.
🧨 US–China Trade War Timeline (2025)
US Starts the Tariff Fight
President Trump signed an Executive Order adding a 10% tariff on all Chinese imports. China responded a few days later with tariffs on coal, LNG, oil, and farming equipment.
US Doubles Down
The US raised tariffs to 20%. In response, China placed levies on US food exports like chicken, wheat, soybeans, pork, fruits, and dairy. The new rates took effect on March 10.
“Liberation Day” Tariffs
Trump introduced an extra 34% tariff on Chinese goods, bringing the total to 54%. The changes kicked in on April 9.
China Hits Back
China imposed a 34% tariff on all US imports and filed a WTO complaint. It also expanded its trade blacklist to include more American companies.
Trump Raises the Stakes
Trump warned China to withdraw its tariffs by April 8 or face another 50% tariff hike. If enforced, that would push US tariffs on Chinese goods to 104%.
China Escalates
China raised its tariffs on US goods to 84%. The US answered with a 125% tariff. Later, officials confirmed the effective rate reached 145%.
China Locks In 125% Tariff
China made its 125% tariff official, effective April 12. It also halted rare earth exports and filed another WTO case. Officials in Beijing dismissed future US tariffs, stating it would “economically meaningless and would ultimately become a laughingstock in the history of global economics.”
The White House is still sticking to its message.
Press Secretary Karoline Leavitt said more than 75 countries had contacted the US to discuss trade, framing the administration’s strategy as a bold success. She said the “phones have been ringing off the hook.” But behind that optimism lies a troubling trend: the financial system is flashing warning signs.
The dollar is sinking. On Friday, it dropped to a three-year low against the euro and fell below the key 100 mark on the dollar index. Gold surged past $3,200 an ounce as investors fled to safety (gold is often seen as a safe-haven asset, used to hedge against market volatility and currency fluctuations).
And US Treasury yields spiked, with the 10-year jumping to 4.52%. That’s the steepest weekly climb since 1981. These aren’t minor ripples. They suggest the perception of US assets as safe havens is starting to crack.
It’s no surprise that economists are revisiting a term from Trump’s first term: tarifflation.
Grace Zwemmer, associate economist at Oxford Economics, wrote in a Friday research note that US inflation could hit 4.5% this year if the paused tariffs are made permanent. If the harsher measures return, the estimate jumps past 5%. And that doesn’t just affect the bond market. It filters down to furniture prices, washing machines, and the cost of building a house.
Federal Reserve officials stepped in this week. Albeit not with action, but with words.
Boston Fed President Susan Collins has said that the central bank has tools ready if financial conditions deteriorate further. Minneapolis Fed President Neel Kashkari cautioned against unnecessary intervention, but didn’t dismiss the idea. While New York Fed President John Williams predicted higher inflation, rising unemployment, and slower growth.
Consumer confidence is already taking a hit.
The University of Michigan’s sentiment index dropped to 50.8 in April, down from 57 in March. That’s not just a bad number. It’s one of the worst in decades. People across age, income, and political lines are reporting financial anxiety.
Internationally, the tremors are spreading
President Lula plans two more meetings with Xi Jinping ahead of the July BRICS summit. A senior diplomat called Brazil’s shift toward China “inevitable.”
Prime Minister Carney slammed US tariffs as “unjustified,” warning they could damage Canada’s auto sector. Ottawa says retaliation is on the table.
In response to US threats over a water treaty, Mexico rushed an emergency water shipment to Texas farmers. Officials hope to avoid trade penalties.
EU finance ministers met in Warsaw to align policy. Trade Commissioner Šefčovič heads to Washington seeking deals. European Commissioner for Trade warns of global recession if tariffs persist. Xi urged Europe to oppose “unilateral bullying.”
Brazil’s President Lula is drawing closer to Beijing. He’s already met with Xi Jinping twice and has two more meetings planned, including a BRICS summit in July. A Brazilian diplomat called the shift “inevitable,” pointing to Trump’s unpredictability as a key driver.
Canada’s Prime Minister Mark Carney took a sharper tone, labeling the US tariffs “unjustified” and vowing to defend Canadian workers, especially in the auto industry. Mexico, under threat of sanctions over a water treaty, rushed to deliver a shipment to Texas farmers. The European Union hasn’t retaliated yet, but officials confirmed that all options remain open.
In the middle of all this, Trump remained mostly silent. No direct response to China’s tariff hike. No public plan for addressing rare earth supply concerns. He spent part of Friday at Walter Reed for his annual physical, then flew to Florida. He did, however, post on social media. None of it related to trade.
Market analysts are starting to voice concerns that go beyond the numbers. The bond market’s behavior as a has been seen as a “no-confidence vote” in US policy. JPMorgan CEO Jamie Dimon said the economy faces real turbulence. BlackRock’s Larry Fink was even more blunt, suggesting the US may already be in recession.
Meanwhile, chatter of insider trading is picking up. Hours before announcing the pause on tariffs (and subsequent market rally), Trump posted on social media: “THIS IS A GREAT TIME TO BUY!!!”
Some senators are already calling for investigations. The White House hasn’t commented on the allegations.
For markets, attention next week will also turn to earnings season. Netflix and UnitedHealth report on Thursday, and analysts expect many companies to avoid giving guidance in the middle of a political minefield.
Even with the rebound on Friday, the S&P 500 remains about 6% below its pre-tariff announcement level. The volatility hasn’t ended… it’s just resting.
Investors, CEOs, and ordinary people are all asking the same thing: how much more of this can the economy take before the cracks become too wide to ignore?