After days of market turmoil sparked by escalating trade tensions, US stocks surged on Tuesday, buoyed by a wave of investor optimism as European and Asian markets also showed signs of stabilisation.
The rebound follows a dramatic few days of economic uncertainty triggered by a growing trade standoff between the United States and China. The White House, seeking to maintain pressure, warned Beijing against what it called a “big mistake” in its retaliatory actions.
US Treasury Secretary Scott Bessent, in a strongly worded statement, criticised China’s countermeasures as “misguided and self-defeating,” after Beijing vowed to “fight to the end” in response to new American tariffs.
This comes after President Donald Trump threatened to impose an additional 50% tariff on Chinese imports if Beijing does not roll back its own 34% retaliatory levy by the end of the day.
The tit-for-tat tariff spat has rattled investors across the globe, with markets swinging wildly over the past week. Tuesday’s rally came as traders speculated on a potential de-escalation or at least a temporary pause in the tariff war, pending further negotiations.
In the UK, Chancellor Rachel Reeves signaled an open stance on transatlantic trade, stating that “nothing is off the table” as Britain looks to strike a broader economic partnership with Washington.
The standoff between the US and China has cast a long shadow over global economic forecasts, with analysts warning that sustained tariffs could slow growth and disrupt supply chains.
Chioma Kalu
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