Background of the Trade Conflict
- US Tariff Policy: US President Donald Trump has pursued an aggressive tariff policy that targets not only China but also other countries like the EU. Tariffs on Chinese goods have been increased to a total of 104 percent, significantly raising costs for importers.
- China’s Reaction: China has imposed retaliatory tariffs of equal amounts and threatens further countermeasures if the USA does not change its policy. Beijing views the US tariffs as “extortion.”
Impact on the DAX and the Global Economy
- Stock Market Losses: The DAX has suffered significant losses in recent trading days. On Monday, the index fell by ten percent but managed to recover slightly during the day. Other European markets, including Paris, London, and Milan, also closed in the red.
- Global Market Developments: Asian markets, including the CSI-300 Index and the Hang Seng Index, have also lost substantial value. The Nikkei Index in Japan dropped by up to eight percent.
- Economic Concerns: Experts warn of a potential recession and a slowdown in economic growth due to the increased tariffs. Rising costs could lead to inflation and drive up consumer prices.
Reactions and Strategies
- Retaliatory Tariffs: Some experts, such as Marcel Fratzscher from the DIW, advocate for retaliatory tariffs against US digital companies to hit Trump’s supporters.
- Political Reactions: Mexico has not ruled out tariffs on US imports but prefers dialogue. The EU is considering strategies to respond to US tariffs.
Overall, the escalation of the trade conflict between the USA and China has significant implications for the global economy and markets, which is highly relevant for investors in Germany.