Tariff turmoil: What's happening in the global economy?

11 April, 2025

It's been a rollercoaster of a week, but here's the gist.

Recent trade tensions between the United States and China have caused significant volatility in global markets. As the situation continues to evolve, it’s important to remember that while these times are difficult, they're also expected—and staying focused on the long-term is the best path forward.

VIX, the “fear gauge,” surged over 130%, indicating heightened market anxiety.
The U.S. dollar fell Wednesday to its lowest level in six months.
Investors are urged to remain focused on their goals and avoid making fear-driven decisions.

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The global markets have experienced swift and sharp volatility over the last week primarily driven by escalating trade tensions, most recently between the United States and China.

Looking back to the week of March the 31st, Bloomberg data shows the S&P 500 Index started its decline and ended the week down approximately 9%, representing the steepest weekly drop since March of 2020.

Monday, April 7, was a rollercoaster on Wall Street but ended with only with a slight decline after a volatile trading day.

By Tuesday, April 8, as tensions between the U.S. and China escalated, the S&P 500 Index narrowly avoided a bear market following news that the White House said it plans to move forward on a threat to bring the overall tariff rate on China to 104%, according to Bloomberg News.

Across this same period, the VIX—a volatility index often referred to as the “fear gauge”—rose by over 130%, reflecting the unease driven by uncertain market dynamics.

And the news continues to unfold—and China announced retaliatory tariffs on imports of U.S. goods—and the U.S. dollar fell to its lowest level in six months after U.S. President Donald Trump’s new tariffs came into effect.

By April the 9th, the majority of the tariffs were actually paused for 90-days. While the tariffs on China rose again to 125%.

Governments worldwide are scrambling to negotiate tariff exemptions or reductions.

In any market cycle, we continue to encourage investors to stay diversified and avoid fear-driven changes to your portfolios.

And most importantly, keep your long-term personal and financial goals in focus.

Sources

CNBC. (2025, April 5) “S&P 500′s 10% 2-day collapse from Trump’s tariff shock ranks among the deepest in history.” Available: https://www.cnbc.com/2025/04/05/sp-500s-10percent-2-day-collapse-from-trumps-tariff-shock-ranks-among-the-deepest-in-history.html

Reuters. (2025, April 8) “Stocks slide again as US forges ahead with 104% tariffs on China.” Available: https://www.reuters.com/world/china-criticises-trump-tariff-blackmail-market-turmoil-settles-2025-04-08/

WSJ. (2025, April 8) “The VIX, Wall Street’s 'Fear Gauge', Is Soaring. Here’s Why.” Available: https://www.wsj.com/livecoverage/stock-market-trump-tariffs-trade-war-04-07-25/card/the-vix-wall-street-s-fear-gauge-is-soaring-here-s-why--n7aloagjCtRlLb4k9Cco

Learn more.

Our view of the impact of tariffs and market uncertainty.

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Learn more.

Our view of the impact of tariffs and market uncertainty.

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