What is a Trade War?

A trade war is a situation where countries try to protect their local industries by imposing heavy import duties (tariffs) on foreign goods. In retaliation, the other country does the same. This leads to increased prices, disrupted trade, and instability in the global economy.

In short, a trade war is an economic fight between nations. One of the biggest trade wars in recent times was the US-China trade war during Donald Trump's presidency from 2018 to 2020.

In 2025, this war has returned with more intensity, often being referred to as Trade War 2.0.

What Triggered US-China Trade War 2.0?

The trade war reignited when Donald Trump came back to power in 2025. On February 1, 2025, he signed an executive order imposing 10% tariffs on all Chinese imports. This move was aimed at "bringing back manufacturing jobs" to the USA and reducing dependency on China.

Within weeks, Trump took even stronger actions:

• -) Declared a National Emergency
• -) Invoked the International Emergency Economic Powers Act (IEEPA)
• -) Increased tariffs to a minimum of 54% on all Chinese goods
• 
  

China didn’t stay silent. They hit back by:

• -) Imposing tariffs on US coal, oil, cars, and agricultural goods
• -) Increasing tariffs on over 100 American products to 125%
• -) Blocking several American apps and websites

This tit-for-tat move has escalated into a global trade disruption.

Timeline of Key Events in 2025

This is not just policy war — it’s a battle for economic supremacy.

🌐 Global Impact of the Trade War

The return of this trade war is already shaking global markets. Here are some key impacts:

1. Global Stock Market Volatility

• Dow Jones and Nasdaq are seeing high fluctuations.
• Shanghai Composite Index is under pressure due to lower exports.
• European markets are affected due to dependence on US-China trade.
• 
  

2. Supply Chain Disruptions

Multinational companies are struggling with:

• Increased input costs
• Uncertain delivery timelines
• Overdependence on China for raw materials and semiconductors

3. Rising Prices (Inflation)

Consumers around the world are paying more for goods, especially electronics, auto parts, and food.

How It Impacts the Indian Stock Market

Although India is not part of the war, our market reacts to global events. Let’s break it down sector-wise and opportunity-wise.

1. Foreign Investment Inflow

Many US companies want to move their manufacturing outside China. Countries like India, Vietnam, and Indonesia are becoming the new favorites.

📈 Indian companies in manufacturing, infrastructure, and electronics are likely to benefit from this shift.

2. Sector-wise Impact on Indian Stocks

3. Rise in Gold, SIPs, and Bonds

Uncertainty leads to safe investments gaining popularity.

• -) Gold prices are rising
• -) Investors are starting SIPs in large-cap and hybrid mutual funds
• -) Government bonds and gold ETFs are seeing inflows

4. Opportunity for Traders

News-based volatility is great for intraday and swing traders. Stocks to watch:

• -) PSU Banks
• -) Energy stocks
• -) Export-focused companies
• -) Gold and commodity ETFs

Using technical analysis and options strategies can yield profits during such volatile phases.v

What Should Indian Investors Do?

At RISEVESTORS Stock Market Institute, we always say: “Markets don’t crash to scare you. They correct to prepare you.” Here are 4 key action steps for Indian investors and traders:

✅ 1. Don’t Panic – Stay Invested

Trade wars create temporary panic but not permanent problems. If your portfolio is diversified, you’ll be safe.

✅ 2. Continue SIPs – It’s Rupee Cost Averaging

Volatility allows your SIPs to buy more units at lower prices, giving better long-term returns.

✅ 3. Stay Informed – News Matters

Keep an eye on global news. Events in the US or China now affect Indian stocks like Reliance, Infosys, and TCS.

✅ 4. Upgrade Your Skills – Learn to Trade Wisely

Use this time to learn price action, options strategies, and market psychology.

We at RISEVESTORS, the best stock market institute in Meerut, offer both beginner to advanced courses. Whether you’re a student, jobholder, or entrepreneur, we’ve got the right course to build your financial future.

Conclusion: Turn Uncertainty Into Opportunity

The US-China Trade War 2.0 is not just about two countries fighting. It’s about a new global order. India stands to gain big as global companies search for reliable partners. But to take advantage of this, you must understand the market, stay consistent, and keep investing in learning.

Learn, Invest, and Grow with RISEVESTORS Stock Market Institute — where the best tutors and mentors are ready to guide you on your journey to financial freedom.

Contact-Us For More Info

Call-Us=+91-8750523232

Visit-Our Website = Www.RiseVestors.com

⚠️ Disclaimer This blog is only for educational purposes. All investment and trading decisions involve market risks. Please consult a SEBI-registered advisor before taking financial decisions. RISEVESTORS does not offer guaranteed returns.