How Trump's Trade War Reshaped Global Markets and Everyday Life
By Michael Izzo
By Michael Izzo
President Donald Trump’s aggressive usage of tariffs began during his first term in 2018 and culminated in 2025 on what President Trump called “Liberation Day." His trade actions have sparked a wave of economic consequences that have left ripples across global markets and the pockets of everyday consumers.
Trump's tariff policies largely target Chinese imports, but also have been seen to affect sworn allies of the U.S. such as Japan and South Korea. These alliances were designed to protect American manufacturing to reduce trade deficits, but the tariffs have triggered widespread market volatility, retaliatory tariffs on both sides, and rising consumer prices.
Tariff Escalation Timeline
The trade war began in March of 2018, when President Trump imposed massive tariffs on all imported steel and aluminum. By July of the same year, 34 billion dollars of Chinese goods faced a 25% tax. The war intensified in September, when an additional 200 billion dollars of Chinese imports were hit with a 10% tariff (which was later raised to 25%).
The biggest and newest shock, however, came in April of this year, when Trump created a declaration which he called “Liberation Day.” He enacted tariffs of up to 145% on a range of all foreign goods. China retaliated swiftly with a 84% raise in retaliatory tariffs. Days later, President Trump announced a 90 day pause on the tariffs, creating a temporary ease in the tensions where the U.S Tariffs on Chinese imports were reduced to 30%.
Market Impacts: From the High Rises in Wall Streets to the Streets of Asia
Global financial markets reacted sharply throughout the trade war. In the wake of President Trump’s “Liberation Day,” U.S indices such as S&P 500, Dow Jones, and Nasdaq suffered significant losses. China’s stock market mirrored the decline, with investor confidence plummeting amid fears of long term economic loss.
In allied countries such as Japan and South Korea, which are extremely export driven economies, both indices of their respective countries, the KOSPI and the Nikkei 255, dropped substantially. South Korea in particular is extremely vulnerable due to its heavy reliance on items such as semiconductor exports, as well as Korea facing some of the worst monthly market losses since the COVID-19 Pandemic.
The Fear Index Soars
With market volatility spiking, the Cboe Volatility Index, often nicknamed Wall Street's “fear gauge,” surged above 50 in 2025. These levels have not been seen since the height of the 2020 Covid pandemics. The index only started to “cool off” when the White House announced the temporary tariff pause.
Price Pressure on Consumers
The trade war has made its presence felt not just on the trading floors of Wall Street, but even in everyday consumer pockets. According to data from the Federal Tax Foundation, U.S families throughout the country are now paying $1,200 to $5,200 more per year due to the higher prices on imported goods.
Major retailers such as Target and Walmart have reported recent price spikes on electronic devices and home goods. For example, a USB-C cable at target jumped from around $9.99 to a staggering $17.99 in just one night following President Trump’s tariff announcement.
Global Implications
While some American manufacturing sectors saw a decent boost, many economists warn the border effects of the tariffs will be extremely negative. Foreign governments have retaliated, American exporters are losing access to key markets, and allies are questioning the reliability of U.S trade leadership and trust.
Countries such as Japan, once a sworn ally of the U.S, began strengthening their regional trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. China, meanwhile, has been accelerating their efforts to build more self-reliant supply chains.
Conclusion
President Trump’s tariff war represents one of the most consequential economic policy experiments in recent history. While aimed at boosting the American economy, the overall long term effects include higher consumer costs, shaken investor convenience, and extremely strained diplomatic relationships.
As global leaders debate what comes next, one idea is clear: the fallout from these policies will shape trade, politics and the households of the everyday consumer for years to come.
Works Cited
“CNBC Reporter Courtney Reagan Explains Exactly How Much Tariffs Will Cost Consumers.” The Daily Beast, 4 June 2025, https://www.thedailybeast.com/cnbc-reporter-courtney-reagan-explains-exactly-how-much-
tariffs-will-cost-consumers/.
“Consumer Prices Rose Slightly in April Amid Trump’s Tariffs.” PBS NewsHour, 5 May 2025,
https://www.pbs.org/newshour/economy/consumer-prices-rose-slightly-in-april-amid-trumps-tariffs.
“Diamonds to Detergent: Weary Consumers Brace for More Price Rises.” Financial Times, May 2025,
https://www.ft.com/content/438b9899-f430-4004-ab16-e11ef25f1f56.
“Examples of Potential Consumer Price Hikes Under Trump’s Tariffs.” Center for American Progress, May 2025, https://www.americanprogress.org/article/examples-of-potential-consumer-price-hikes-under-trumps-
tariffs/.
“Japan Stocks Rebound More Than 9% After Trump’s Tariff Reversal.” The Japan Times, 10 Apr. 2025,
https://www.japantimes.co.jp/business/2025/04/10/markets/nikkei-rebound-tariff-pause/.
Kugler, Adriana. “Fed’s Kugler: Higher Inflation Bigger Risk Than Weak Employment.” Barron’s, 6 June 2025,
https://www.barrons.com/articles/fed-inflation-interest-rates-tariffs-kugler-e51fef7f.
“Rising Prices, War Rooms and Layoffs: The Cost of Trump’s Tariffs Is Coming.” The Washington Post, 5 June
2025, https://www.washingtonpost.com/business/2025/06/05/tariffs-cost-retailers-consumers-trump/.
“Take Five: It’s TACO Time.” Reuters, 6 June 2025, https://www.reuters.com/business/take-five/global-markets-
themes-graphic-2025-06-06/.
“The Impact of U.S. Trade Policy on South Korea.” Korea Economic Institute of America, May 2025,
https://keia.org/the-peninsula/the-impact-of-u-s-trade-policy-on-south-korea/.
“Trump Tariffs: Tracking the Economic Impact of the Trump Trade War.” Tax Foundation, Apr. 2025,
https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/.
“Trump’s Tariffs Have So Far Caused Little Inflation.” The Economist, 5 June 2025,
https://www.economist.com/finance-and-economics/2025/06/05/trumps-tariffs-have-so-far-caused-little-
inflation.
“US-China Trade War Tariffs: An Up-to-Date Chart.” Peterson Institute for International Economics, Apr. 2025,
https://www.piie.com/research/piie-charts/2019/us-china-trade-war-tariffs-date-chart.
“VIX Drops Sharply After Trump Authorizes Tariff Pause.” The Wall Street Journal, 9 Apr. 2025,
after-trump-authorizes-tariff-pause-lUwVLrlpMI7gadVzhhtK.