Background of the Trade Conflict
The trade war between the USA and China has intensified in recent weeks. US President Donald Trump has announced extensive tariffs on imports from various countries, leading to a massive reaction in the stock markets. China is responding with counter-tariffs and has announced that it will “fight to the end” in case of further escalation.
Effects on the Dax
The Dax, Germany’s most important stock index, has had to endure significant losses as a result of the tariff conflict. After a strong drop, the index was able to partially recover but remains volatile. The uncertainty caused by President Trump’s protectionist policies creates a “toxic mix” in the market: buyers have become scarce, while investors want to take profits with every recovery.
Global Market Developments
The global economy is facing a potential downturn as a result of the trade war. The ECB warns of risks for monetary policy due to increased inflation and a global trade war. Other exchanges, such as the Dow Jones or Nikkei, also show strong fluctuations.
Reactions of Other Countries
- European Union (EU): The EU plans retaliatory measures against US tariffs starting next week. EU Commission President Ursula von der Leyen proposed to abolish all mutual tariffs on industrial goods – a suggestion that Trump rejected.
- China: Beijing threatens vigorous measures to defend its economic interests in the conflict with the USA.
- Other Countries: Israel announced that it would reduce tariffs on US imports; Canada sought support from the World Trade Organization against US tariffs; Japan signaled readiness for talks to resolve the conflict over car tariffs.
Forecasts and Perspectives
The outlook for the future remains uncertain. While some experts fear that the new tariffs could dampen global growth and even lead to a recession, President Trump continues to hope for positive effects of his policies for the US economy.
For private investors, it is crucial to remain flexible and continuously adjust their investment strategies. In light of high volatility, it may be advisable to position themselves diversely or to switch to safer investments like gold or government bonds.
Overall, the market environment remains extraordinarily uncertain, with a toxic mix of inflation worries and possible recession—a situation that is both politically and economically challenging.