Trade War Scorecard: US-China Tariff Battle Heats Up – Shayne Heffernan $SPY $FXI $CNY
By Shayne Heffernan, April 10, 2025
I’ve been closely monitoring the escalating trade war between the US and China, and I think it’s time to break down the latest developments in what I’m calling the Trade War Scorecard. As of today, Thursday, April 10, 2025, the tariff battle has intensified, with both nations doubling down and global markets feeling the impact. Let’s dive into the key moves, how they’re affecting the markets, and what investors should watch for with $SPY, $FXI, and $CNY.
The Latest Moves: US and China Dig In
I’ve been following this trade war for a while, and the past few days have been intense. On Wednesday, President Donald Trump raised tariffs on Chinese imports to a whopping 125%, just hours after China increased duties on American goods to 84%. This back-and-forth started when Trump initially imposed a 104% tariff on China, prompting Beijing to hit back. I think this escalation shows neither side is ready to back down, and it’s turning into a high-stakes economic showdown.
Here’s where things get interesting: late Wednesday, Trump announced a 90-day pause on the “reciprocal” tariffs he’d placed on dozens of other countries, keeping a universal 10% levy in place for most nations except China. I’ve seen how markets react to these policy shifts, and this one triggered a historic rally—global stocks soared, with the S&P 500 ($SPY) seeing one of its biggest days since World War II. I think this pause gave investors a moment of relief, but the focus on China keeps the tension high.
China isn’t sitting idle. Beijing filed a new complaint with the World Trade Organization (WTO), calling the US tariffs “reckless” and warning they could destabilize global trade. The WTO estimates that this trade war could slash US-China goods trade by 80% and shrink the global economy by nearly 7% if it leads to a bifurcated world. I’ve been tracking the Chinese yuan ($CNY), and I’m not surprised to see it under pressure as these tariffs take their toll. The iShares China Large-Cap ETF ($FXI) also took a hit, reflecting investor worries about China’s economic future.
Market Reactions: Winners and Losers
I’ve been watching the markets closely, and the reactions to these tariff moves tell a clear story. The 90-day pause on tariffs for most countries—except China—gave a big lift to global stocks. I saw oil prices jump 4% on Wednesday after Trump’s announcement, bouncing back from four-year lows. That’s a win for energy investors, but I think it also shows how sensitive markets are to any hint of de-escalation.
On the other hand, the US-China tariff escalation is hitting certain sectors hard. I’ve noticed that companies with heavy exposure to China, like those in the $FXI, are feeling the strain. The Chinese yuan ($CNY) is weakening, which makes sense given the trade pressures. I think this could lead to more volatility in Asian markets, especially if China’s trade balance data—due out tomorrow, Friday, April 11—shows a drop in exports. I’m also keeping an eye on $SPY, because while the broader market rallied, any bad news on inflation or consumer sentiment could reverse those gains.
What Investors Should Watch For
For investors, I think this trade war creates both risks and opportunities. The $SPY rally shows that markets are still hopeful for a potential resolution, but the $FXI and $CNY weakness tells me China’s economy is under real pressure. I’ve been through enough market cycles to know that volatility like this can create buying opportunities, especially in sectors that get oversold. I’m looking at energy and consumer staples as potential safe havens, while keeping a close watch on how these tariffs play out.
Thursday and Friday: Key Events to Monitor
Today, Thursday, April 10, we’ve got some major economic data releases that could add more fuel to the fire. The US Initial Jobless Claims and Consumer Price Index (CPI) for March are out, and I’m expecting some market movement. If inflation is higher than expected, I think we’ll see more selling in $SPY, which could drag down other assets too. Over in the Eurozone, the ECB’s interest rate decision is happening, and I’m curious to see if they’ll cut rates, which could weaken the euro and affect global markets.
Tomorrow, Friday, April 11, the US Producer Price Index (PPI) and Consumer Sentiment Index are coming out. I think the PPI will be a key indicator—if wholesale inflation is up, it might signal more consumer price hikes down the road, which could hurt markets. The Consumer Sentiment Index will tell us how people are feeling about the economy, and I’m hoping for a positive number to boost confidence. China’s Trade Balance data for March is also due, and I’m concerned that a drop in exports could signal more trouble for global trade, impacting Asian markets like $FXI.
I think we need to stay sharp and monitor these events closely. The trade war between the US and China is far from over, and while the pause on tariffs for other countries is a good sign, the focus on China keeps the stakes high. I’d love to hear your thoughts on how investors should navigate this!
