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Global Trade Tensions Escalate as New U.S. Tariffs Take Effect
PoraShuno Business & Economy | August 2025
President Donald Trump’s wide-ranging new tariffs officially took effect just after midnight, marking a major escalation in the ongoing global trade conflict. The duties apply to dozens of countries and follow months of geopolitical maneuvering, temporary exemptions, and high-stakes negotiations.
Behind the scenes, diplomats are still working to reduce the scope and severity of the new measures. The Swiss government, for example, has called an emergency meeting after President Karin Keller-Sutter returned from Washington without securing relief from a 39% tariff.
India Responds Firmly
India has been among the hardest hit by the new trade measures. U.S. tariffs on Indian exports have now doubled to 50%, largely in response to New Delhi’s continued purchases of Russian oil. Indian Prime Minister Narendra Modi responded defiantly, vowing not to compromise on his government’s commitment to protecting Indian farmers.
“India will not bow to external pressure when it comes to safeguarding our agrarian interests,” Modi stated.
Despite these tensions, Indian markets remained relatively stable, with the Sensex index dipping only slightly. However, analysts caution that the full impact of the additional levies may unfold in the coming weeks.
Markets React Calmly to Tariff Shock
In a sharp contrast to earlier phases of the trade war, global financial markets responded calmly to the latest tariff announcement. U.S. stock futures rose early Thursday, and the Nasdaq Composite closed just shy of a record high on Wednesday.
Apple Inc. led the rally, gaining over 5% on Wednesday, and continuing to climb in premarket trading Thursday. The iPhone maker’s announcement of a $100 billion investment in U.S. manufacturing has helped insulate it from potential penalties, despite President Trump’s threat of 100% tariffs on semiconductor imports.
“Companies investing in America will be rewarded,” Trump said, hinting that exemptions may be extended to firms like Apple.
Other chip-related stocks also gained, with investors betting on more favorable treatment for firms contributing to U.S. tech sovereignty.
Earnings & Economic Updates
Several key earnings reports are expected today, including:
- ConocoPhillips (energy)
- Eli Lilly (pharmaceuticals, especially in the obesity drug segment)
- Krispy Kreme (consumer food)
- Hertz Global (transportation & rental services)
Notably, Krispy Kreme and Hertz are both companies with strong meme-stock appeal, which may drive retail investor interest in the short term.
In economic policy developments, the Bank of England has cut interest rates for the fifth time since last August, signaling growing concerns about stagnation in the UK economy.
In the United States, weekly jobless claims data is scheduled for release at 8:30 a.m. ET, which may offer insights into the labor market’s resilience amid rising trade tensions and monetary policy uncertainty.
Currency & Bond Market Movements
- The WSJ Dollar Index fell for the second consecutive day, as the U.S. dollar weakened against both the Japanese yen and the Swiss franc.
- Treasury yields moved higher, ahead of a planned $25 billion auction of 30-year bonds, indicating sustained investor interest in long-term U.S. debt.
Global Outlook
President Trump’s renewed push for protectionist trade policies comes at a critical juncture for the global economy. With rising geopolitical instability and shifting economic alliances, the decisions made in Washington are likely to have far-reaching consequences.
While some economies may absorb the short-term impact of these tariffs, others — especially emerging markets like India — could face long-term structural challenges if trade tensions remain elevated.
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