How Trump's trade war has upended global economy

Since his return to the White House in 2025, President Donald Trump's policies have reshaped international trade, influenced market dynamics, and altered economic relationships worldwide.

- Somshankar Bandyopadhyay [e-mail]

According to an analysis by the American Institute for Economic Research, the S&P 500 lost approximately $4.7 trillion in market value due to tariff-related announcements.

The “Magnificent Seven” tech giants were hit particularly hard, losing $2 trillion in value.

According to JPMorgan Research, global GDP could decline by up to 1 per cent due to reduced trade and investment. Business sentiment and consumer confidence have weakened, contributing to market uncertainty. The risk of a global recession rose to 40 per cent at one point in early 2025.

One of the most notable aspects of Trump’s economic policy has been his aggressive use of tariffs. In his first term, Trump imposed tariffs on a wide range of Chinese goods, aiming to reduce the trade deficit and encourage domestic manufacturing. This approach has continued into his second term, with new tariffs on copper and pharmaceuticals. These measures have led to increased prices for these commodities, affecting industries and consumers globally.