Trump's Trade War Escalation Rattles Global Markets

Amid escalating trade tensions, safe haven currencies like the yen and Swiss franc saw a surge, as President Trump's trade war with China further intensified. Despite a brief tariff pause, markets remain unsettled, fearing long-term economic impacts and a potential erosion of U.S. international reputation.

The financial markets witnessed a return to safe havens such as the yen and Swiss franc following President Trump's intensification of the trade war with China. Traders quickly sold the Australian dollar on Thursday, reflecting ongoing uncertainty about global economic conditions.

Markets experienced a temporary relief with Trump's 90-day tariff pause, leading to a surge in risk-sensitive currencies like the yen and Swiss franc. However, the move only partially alleviated concerns as Trump increased tariffs on Chinese goods to 125% from the baseline 10%, stirring fears about long-term growth impacts.

Despite the temporary pause, analysts warn of the U.S.'s reputation damage and potential recession. The Chinese yuan weakened as talks of an economic standoff grew. Beijing filed a new complaint with the WTO, marking a critical escalation in the U.S.-China trade confrontation.

(With inputs from agencies.)