The global financial landscape has been rocked once again by a wave of new U.S. tariff measures.
As investors try to make sense of the headlines, one thing is clear: volatility is back, and it’s here to stay at least for now.
With markets reacting swiftly and unpredictably, understanding what’s next is crucial.
The tariff timeline – where are we now?
Tariffs, taxes on imported goods have long been used as a tool of trade negotiation, and in 2025, they’re back in the spotlight.
President Trump’s latest round of tariffs includes a baseline 10% rate on many goods and a proposal for “reciprocal tariffs” aimed at countries with which the U.S. runs a trade deficit.
Though these have now been paused for 90 days, the uncertainty they introduced remains firmly in place.
China continues to be a primary focus of U.S. trade policy. The current tariff rate on Chinese goods has soared to 125%, a dramatic escalation aimed at curbing what the U.S. sees as unfair trade practices including intellectual property theft and forced tech transfers. Whether this will lead to a breakthrough or a prolonged standoff is still uncertain.
Market reactions so far
The markets don’t respond well to unpredictability, and this round of tariffs has been no exception.
Following the announcement of increased tariffs on China, shares of companies with significant revenue exposure to China or those relying on Chinese supply chains experienced sharp declines.
For example, DuPont dropped 12.7% after China announced an anti-trust investigation into its subsidiary. GE Healthcare, with 12% of its revenue from China, fell 16%.
Conversely, when a pause on some tariffs was announced, stocks of companies sensitive to global trade and consumer confidence saw significant rallies.
Delta Air Lines soared 23.4% on hopes of reduced trade tensions boosting travel demand.
Following the tariff pause, the Euro gained to its strongest level since November against the US dollar, indicating a shift in investor sentiment towards potentially reduced trade tensions.
The bond market reacted strongly to the imposition of tariffs, with the yield on the 2-year Treasury note rising by as much as 0.3 percentage points, the biggest intraday move since 2009. This “bond vigilante” action signalled investor disapproval of the tariff policy and its potential for economic harm.
Conversely, when the tariff pause was announced, the yield on the 10-year Treasury fell to 4.34% after approaching 4.50% earlier in the day, indicating a decrease in concerns about immediate economic fallout.
Analysis suggests that the Detroit Three automakers could face tariffs of nearly $5,000 per imported parts per car produced in the US, and about $8,600 per imported car. This highlights the significant cost implications for specific industries.
Data from ShipHero LLC indicated a 3.9% price increase on a variety of e-commerce goods in the days following a recent tariff announcement, suggesting that the costs are already being passed on to consumers in some sectors.
Bank of America estimates that the new duties could raise average car prices by $4,500.
What investors should look out for next
As we move forward, keep an eye on:
- China–U.S. trade negotiations: A de-escalation could restore confidence, while further conflict could rattle markets again.
- Central bank responses: Monetary policy might shift to buffer against trade-driven economic slowdowns.
Sector-specific risks: Companies reliant on global supply chains could remain under pressure. - Consumer confidence and inflation: As import costs rise, so could prices, potentially dampening spending.
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Final thoughts
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