Financial Turmoil: U.S.-China Trade War Roils Global Markets

The escalating trade war between the U.S. and China has led to a major selloff in global markets, affecting stocks, bonds, and currencies. President Trump's 104% tariffs on China and Beijing's 84% retaliation have intensified fears of a recession, causing significant volatility and shifts in investor behavior.

The global markets experienced a dramatic upheaval on Wednesday as the trade conflict between the United States and China escalated, resulting in a widespread selloff in U.S. assets. The introduction of President Donald Trump's 104% tariffs on Chinese imports prompted a rapid response from Beijing, imposing 84% duties on American goods.

This drastic move has led to a concerning exit from U.S. Treasuries and the dollar, which are essential components of the global financial framework. According to George Saravelos, head of foreign exchange research at Deutsche Bank, the current situation marks an unprecedented decline in U.S. asset prices, indicating a shift into uncharted financial territory.

Investors' fears over a possible recession and potential interest rate cuts by the Federal Reserve have further fueled this volatility. The dollar, typically a safe haven, declined sharply, as investors sought refuge in gold and the Swiss franc. Additionally, a steep increase in the U.S. 10-year note yield and significant losses in global equity indices highlight the market's reaction to the ongoing trade tensions.

(With inputs from agencies.)