US-China Trade War: Season Two Kicks Off
In 2018, US President Donald Trump fired the first shot in what became known as the US-China trade war. This economic clash stemmed from Trump’s concerns about the United States’ trade relationship with China, citing issues like a growing trade deficit, intellectual property theft, and technology transfer.
Fast forward to 2025, and Trump is back in office, ready to resume his trade war efforts. With the mantra “tax” as the “most beautiful word,” Trump is doubling down on his ‘America First’ approach. His goal is to support American businesses, boost the economy, and create jobs by reducing imports. While critics doubt the effectiveness of this strategy, Trump has wasted no time in imposing tariffs on key trade partners.
“They don’t buy our cars, they don’t buy our agricultural products, they almost don’t buy anything, but we buy everything from them,” Trump declared, justifying his decision to levy taxes on countries like Canada, Mexico, and China.
Trump’s trade policy aims to protect American jobs and address unemployment concerns. By imposing tariffs, he hopes to level the playing field for American workers and companies, signaling a shift away from the previous administration’s approach.
Top US Trade Partners in 2025
- Mexico: $839.9 billion
- Canada: $762.1 billion
- China: $582.5 billion
- Germany: $236.0 billion
While the US boasts significant trade volumes with these countries, it also faces trade deficits with many others. The ongoing trade wars signal a potential economic shakeup, raising questions about the macroeconomic readiness of the American economy.
US Gross Domestic Product Performance
Over the past eight years, the US economy has shown remarkable resilience and growth. Despite challenges like the COVID-19 pandemic, the GDP has seen steady expansion:
- 2017: 2.5%
- 2018: 3.0%
- 2019: 2.6%
- 2020: -0.9%
- 2021: 10.9%
- 2022: 9.8%
- 2023: 6.6%
- 2024: 5.2%
While trade wars have been a factor in recent years, other global events have played a more significant role in shaping the economic landscape.
US Consumer Price Index Trends
Inflation rates in the US have fluctuated over the past eight years, influenced by various factors:
- 2017: Stable
- 2018: 2%
- 2019: 1.8%
- 2020: 1.2%
- 2021: 4.7%
- 2022: 8.0%
- 2023: 4.1%
- 2024: 2.9%
The Federal Reserve has implemented measures to curb rising inflation, indicating a delicate balance between economic growth and price stability.
US Dollar Index Performance
The US Dollar Index (DXY) has seen notable fluctuations over the years, responding to economic and geopolitical events:
- 2022: Peak at 110.05
- 2023: Decline to 101.33
Technical Analysis Insights
The Dollar Index, Daily
Market sentiment and foreign policy decisions have influenced the recent performance of the US Dollar Index, highlighting the interplay between politics and economics in shaping currency values.
The Current State of the Market
As the world’s top investment manager, I am closely monitoring the developments in the financial markets to provide you with valuable insights into the current trends. Let’s take a look at the latest updates:
US Dollar Weekly Chart
In the weekly time series, the bull market continues to dominate. However, the possibility of new tariffs coming into force is increasing pressure. In the Dollar Index, where graphical analysis is dominant, declines may reach the level of 100.450 if there are strong responses to the sanctions imposed by President Trump.
EUR/USD, Weekly
The EUR/USD weekly chart reflects a consolidation phase with key resistance at 1.0850 and support at 1.0700. Traders should monitor these levels closely, as a breakout in either direction could set the tone for the pair’s next significant move.
Technical analysis indicates that the pair is in a consolidation phase, with strong resistance expected around the 1.12570 level, corresponding to the 50% Fibonacci retracement. Conversely, a decline below the 1.0700 support may resume the downward trend towards the 1.023/0.958 support zone than the minimums.
US100, Weekly
The US100 index, also known as the NASDAQ-100 (NDX), is a stock market index that includes 100 of the largest non-financial and technology-focused companies listed on the NASDAQ Stock Exchange. The index is heavily weighted towards tech giants like Apple, Microsoft, Amazon, Google, and Tesla, making it highly sensitive to trends in the tech industry.
If China responds to US sanctions, the US100 could be the most affected by the trade war. After the price reaches maximum levels, rebounds are seen. When the price is rising and the RSI oscillator is falling, disagreements arise.
If the trend line is broken and the price continues to fall, the target is seen as 18450.
Ongoing Crises
The problems awaiting solution include the Russia-Ukraine crisis. To end this crisis, US and Russian officials held talks in Saudi Arabia. If the embargoes on Russia are lifted when the crisis ends, it will allow Russia to regain global markets. Russia has a significant share of world trade with its underground resources, gas, and trade volume. Russia’s re-emergence in global markets will directly affect commodities in particular. The strengthening of large companies such as Gazprom and Lukoil will also be inevitable.
Conclusion
As an award-winning financial journalist, I can confidently say that the US economy continues to develop stably and remain loyal to the determined inflation and interest rates. New tariffs imposed on trading partners will force large companies to invest in the US, which will stimulate the US labor market and make the economy more active. However, new tariffs will not go unanswered. Countries with large economies like China can show that this war is not one-sided. The US’s desire to prove once again that it is the speaker and decision-maker among countries goes through the tariffs. On the other hand, it is no longer right to talk about a single big economy concept. Many countries in the world have declared their economic and all-around freedom.
Analysis of the Content
From the information provided, we can see that the financial markets are currently influenced by factors such as new tariffs, responses to sanctions, and ongoing geopolitical crises. The US Dollar, EUR/USD, and US100 index are all showing signs of volatility and possible shifts in trends. Traders and investors should closely monitor these developments to make informed decisions.
The ongoing Russia-Ukraine crisis and the potential impact on global markets highlight the interconnected nature of the world economy. As financial markets react to geopolitical events and trade tensions, it is crucial for individuals to understand how these factors can affect their investments and financial future.
By staying informed and seeking expert advice from top investment managers and financial journalists, individuals can navigate the complexities of the financial markets and make strategic decisions to secure their financial well-being. As the world of finance continues to evolve, knowledge and awareness are key to achieving long-term financial success.