Trade tensions are at its peak, with China agreeing to talks with the US, and the UK striking a deal with Trump’s governments. This instability in the global economy heavily impacted international markets, currencies, commodities, and emerging asset classes like cryptocurrencies. Every aspect of global trade has been shaken up by trade wars, affecting everyone from importers to end consumers.
US-China Trade Talks: A Stalemate with Global Repercussions
As soon as the new American President took office, he started talking about imposing tariffs on all imported goods in the United States. The plan was to jumpstart the American economy that’s been in dire straits from recession back in 2008. Since then, almost all production moved to China and Southeast Asia, depleting the US government’s budget. The attempt to revive the economy and create American jobs was seen in bringing back manufacturing to the US, thus creating jobs and generating liquidity.
However, the idea might seem great in theory, but in reality, there were a lot of problems. Ships stopped coming to the US, prices of necessities like food and rent spiked, and jobs remained scarce. Markets plunged to all-time lows, dragging down cryptos and all online businesses. Some platforms like Bitcasino.io absorbed the impact very well, by staying stable and offering their users to continue playing while the markets stabilize enough to cash out.
Among the first countries to be hit was China. Tariffs were imposed gradually, first at 25%, then up to 84% and finally stopping at 145%. To retaliate, China backfired with its own set of taxes reaching 125% on imported American goods. This tit-for-tat political war came to a standstill with China abruptly going silent. It took over a month to get the Chinese to the table and start negotiating.
Political and economic affairs are on ice between the two superpowers that are about to begin deliberations on where to go from here. In the meantime, while their payback measures were going back and forth, the ripple effect seriously damaged other economies.
From the American side, negotiations are led by U.S. Treasury Secretary Scott Bessent and Trade Negotiator Jamieson Greer. It almost feels like it’s a symbolic effort to start talks, while the experts remain skeptical about any meaningful resolution, being that the two countries have no common ground to begin. Adding the mutual dependency to the mix will additionally complicate any potential agreements down the road.
US-UK Trade Deal: A Limited Yet Symbolic Agreement
The two nations managed to agree on lowering some tariffs. The US agreed to lower import taxes on the UK steel and aluminum from 25% to 10%, and on British car exports from 27% to 10% but limited to 100,000 cars per year. To reciprocate, the UK lowered tariffs on American beef and ethanol.
This was seen as a step in the right direction, but there’s a long road ahead of the two countries. President Trump marked the deal as “historic” while many economists have been warning that it’s far from the desired free global trade.
The impact on markets has been staggering.
- The British Pound Sterling has shown some uprise with the US-UK deal, but the results didn’t bring the anticipated relief. According to the agreement, British exports are limited, automobile trade is capped, and the services were not included. If the US administration decides to tighten the noose around the British economy some more or backpedal on the deal, the national currency might lose momentum.
The pound rallied by 0.6% in the week following the trade deal, rising above $1.33 against the dollar but the temporary optimism was hampered by long-term impact that weighs on other nations, creating broader complications for the UK economy. This especially applies to the US-China frictions and their inability to solve the issues in a meaningful way.
- The US dollar found itself on the shaky ground. It’s still the dominant currency around the world, but many countries, mainly BRICS, are considering dropping the dollar for their own, newly made legal tender. This created additional tensions and slowed down the talks, with every side fostering doubt about the sustainability of the possible deal.
- Gold prices surged from $2,020 per ounce in January to over $2,350 in early May 2025, hitting their highest levels since 2020. This came as the expected turn of events given that currencies became volatile, and many economies turned to gold as the ultimate asset.
- Crude oil prices dropped since the economies slowed their production and manufacturing businesses. It peaked at $94 per barrel but quickly dropped down to around $80. OPEC+ is reportedly considering lowering the production for the third quarter, in an attempt to stabilize the price.
- In all, the domino effect is felt around the globe with stiff US tariffs and a weak US-UK deal that didn’t have an expected effect with its limitations and exclusions. The future hangs on global leaders finding common interests and mutual understanding. Meanwhile, smaller economies are grabbing straws to stay afloat, while global superpowers try to deescalate the trade crisis.