Date Published: May 30, 2025
May 2025 witnessed renewed volatility as President Trump announced increased tariffs on steel and aluminum imports, stoking economic uncertainty.
These measures were expected to drive higher prices for US consumers and heighten trade friction, especially with China reportedly slow-walking rare earth export approvals and retaliating through regulatory delays.
Markets reacted with pronounced swings: while both the S&P 500 and Nasdaq concluded May with their largest monthly gains since November 2023 (S&P up 6.2%, Nasdaq 9.6%), the day-to-day environment was marked by frequent selloffs and rallies, reflecting the fragile nature of US–China relations.
Negotiations stalled mid-month, with Treasury officials citing “a bit of a stall,” and court battles over tariff legality left future policy uncertain.
Business confidence surveys pointed to delayed investment decisions, while manufacturing and logistics sectors reported rising costs tied to supply chain disruptions and elevated input prices.
Despite strong market recoveries from April lows, analysts warned that persistent trade friction and inconsistent policy messaging continued to threaten medium-term growth prospects and corporate planning stability.