Following his meeting with Spanish Prime Minister Pedro Sanchez on Friday, Chinese President Xi Jinping said that “there is no winner in a tariff war.”
Additional quotes
- No matter the changes to external environment, China will strengthen its confidence.
- To maintain determination and concentrate on doing its own thing.
- China and Europe should stick to partnership and adhere to open cooperation.
- China and Europe should fulfil international responsibilities, jointly maintain international trade order.
- Both sides should not only safeguard own interests but international fairness and justice.
Market reaction
At the time of writing, US S&P 500 futures. the risk barometer, is up 1.08% on the day while the US Dollar Index (DXY) recovers losses to trade near 100.50.
US-China Trade War FAQs
Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.
An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.
The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
Gold retains solid gains after reaching fresh record highs Premium
Gold price hit yet another record high on Monday, as the US Dollar sell-off continued on the back of US President Donald Trump’s criticism of Federal Reserve Chair Jerome Powell, fueling concerns about the future of the US economy.
AUD/USD eases from fresh 2025 highs, holds above 0.6400 Premium
The Australian Dollar surged against its American rival to a fresh yearly high of 0.6437. The poor performance of Wall Street pushed AUD/USD lower ahead of the daily close, but broad USD weakness is likely to keep Aussie on the winning side.
EUR/USD hovers above 1.1500 as investors drop the USD
The EUR/USD pair traded as high as 1.1574 on Monday, retreating from the over three-year high as fears cooled in the American session. Still, Wall Street edged sharply lower amid concerns about the Federal Reserve's autonomy.
Bitcoin traders celebrate 3.125 BTC halving anniversary with $90K price prediction
Bitcoin price surges past $88,000 on Monday as traders mark the 3.125 BTC halving anniversary amid a rapid shift in investor focus away from USD-based investments.
Five fundamentals for the week: Traders confront the trade war, important surveys, key Fed speech Premium
Will the US strike a trade deal with Japan? That would be positive progress. However, recent developments are not that positive, and there's only one certainty: headlines will dominate markets. Fresh US economic data is also of interest.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.