Trump's new tariff threats cause market disruption and uncertainty

From Yahoo Finance: 2025-05-23 16:35:00

Global markets were jolted by Trump’s threat of 50% tariffs on European goods and a potential 25% charge on Apple iPhones in the U.S., leading to a steep weekly decline in European and U.S. stocks. Analysts believe tariff fears are contained, but uncertainty remains high, injecting risk back into the markets.

Barclays economists estimate that if the 50% tariffs on EU goods are implemented, the overall trade-weighted tariff rate on all U.S. imports would rise to 21%, potentially causing a 0.5 percentage point hit to GDP growth and bringing the U.S. economy close to recession.

Long-term bond yields in many G7 countries, including the U.S., Japan, and Britain, hit multi-year or record highs due to weak auctions, debt and deficit concerns, and policy paralysis fears. Moody’s recent downgrade of the U.S.’s credit rating also weighed on Treasury prices.

The dollar’s decline, despite rising U.S. Treasury yields, raised concerns on Wall Street. Market distortions are expected due to the upcoming U.S. and UK holidays and month-end flows, alongside renewed global trade tensions and historically high bond yields.



Read more at Yahoo Finance: Trump shatters tariff calm with new salvo