it's finally started

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Global Recap
April 09, 2025 • Read in: 13 minutes

Hi Global Recap readers,

For the past two days, markets have been rallying, fueled by some sketchy fake news circulating on X and wishful thinking that Trump might walk back his threat of slapping a massive 104% tariff on China.

But the moment Press Secretary Leavitt confirmed that those tariffs are full steam ahead, the rally hit a wall—and the market puked.

More on that as our first story of today: 👇️ 

✍️ The latest update as of writing: The 10-year yield just shot past 4.5%, and the 30-year hit 5%—a clear sign that someone big is dumping bonds. If Trump’s playing 4D chess to tank the markets and force yields and inflation down, as his supporters are claiming, it’s backfiring hard.

❓️ So what’s going on? It could be China making a move—offloading US debt as a form of economic retaliation (this is risky for them too). Or maybe it's countries like Japan scrambling for liquidity. Either way, it's a red flag, and the implications are huge.

🇺🇸 UNITED STATES
104% China Tariff
Is a Go

White House Press Secretary Leavitt announced that the US is moving forward with a massive 104% tariff on Chinese imports—effective April 9, 12:01 a.m. EST.

What’s Going On?

  • China faces the worst hit with a 104% tariff, while other countries get duties of up to 50%.

  • Talks are in the works with Japan and South Korea, but China? Completely sidelined.

Wall Street Freakout

The markets are not loving this news.

All the major indexes—and a bunch of individual stocks—had been surging, with online users dubbing it a “Trump Pump.” But the moment Leavitt made the announcement, the S&P 500 tanked—flipping from green to red in a matter of minutes.

  • Reminder: US stocks have lost $5.8 trillion in value since last week’s tariff announcement, but much more since the start of this downtrend.

  • Asian markets, like Japan’s Nikkei, are bracing for more chaos.

China’s Fightback

China isn’t exactly sitting quietly on this one. They’ve called the tariffs “blackmail” and are ready to fight back.

  • Citi just slashed its 2025 GDP growth forecast for China from 4.7% to 4.2%. Not great.

  • Manufacturers are scrambling to move operations to other countries to dodge the economic storm.

🤔 Thoughts: China pretty much has to hit back—doing nothing would make them look like paper tigers, and they can’t afford to seem weak on the world stage.

American Wallets

For US consumers, if this “trade war” keeps up, things are about to get expensive. If you thought price increases were bad before, brace yourself.

  • According to a poll, 75% of Americans think prices are going to rise because of these tariffs.

  • Sneakers from Vietnam that usually cost $155? Soon, they could set you back $220.

  • Apple investors had been sweating over sluggish iPhone sales—but not anymore. With tariffs looming, consumers are now “panic-buying” iPhones to dodge the expected price hikes, giving sales a sudden boost.

  • Retailers are already delaying orders, and consumers are bulk-buying essentials like beans and flour.

💡 Additional Info: 

You might wonder—why does public sentiment about inflation even matter?

Well, it’s because expectations shape behavior. If people think prices are going up, they tend to buy early to get ahead of the hike. That rush boosts demand, squeezes supply, and ends up pushing prices even higher. It’s a feedback loop that feeds the very inflation everyone’s trying to avoid.

But like we talked about in earlier emails, tariffs are essentially taxes on imported goods, which often get passed on to consumers. In the short term, this tends to be inflationary, but over time, if wages don’t keep pace and people start feeling the squeeze, overall spending can slow—introducing potential deflationary pressure down the line as demand weakens.

📉 Is deflation really Trump’s endgame? That’s up for debate. What’s clear is that businesses are struggling to chart a course through all this uncertainty. And despite what some might hope, deflation isn’t a win. It signals shrinking demand, falling profits, and job cuts. Job cuts can speed up a collapse in demand, leading to further job cuts. What you want is disinflation—a slowdown in rising prices, not prices going into free fall.

Further Plans

Despite plenty of voices urging him to dial it back, Trump is doubling down on his aggressive tariff plan. He insists it’ll reshape global trade for the better—even if it ruffles some feathers along the way.

  • There’s already talk of new tariffs on pharmaceutical imports.

  • Critics warn these measures could lead to a recession and strain relationships with allies.

🇺🇦 UKRAINE
Chinese Fighters in Ukraine

Speaking of China: Ukraine claims to have captured two Chinese nationals fighting for Russia in eastern Ukraine, raising questions about Beijing’s role in the ongoing war.

If true, this would be definitive proof that three separate nations are now actively fighting alongside Russia against Ukraine.

Zelenskyy’s Statement

President Volodymyr Zelenskyy announced the capture during a press conference in Kyiv. The above video is from President Zelenskyy’s official X account.

  • He suggested there may be more Chinese citizens involved in the conflict.

  • Zelenskyy emphasized that this signals Russia’s intent to prolong the war.

Beijing’s Silence

China has yet to respond to the allegations.

  • The Chinese Foreign Ministry did not comment on the claims.

  • Ukraine summoned China’s charge d’affaires to demand an explanation.

US Reaction

The US State Department called the reports “disturbing” but hasn’t verified them.

  • Officials highlighted China’s supply of dual-use items to Russia as a major concern.

  • Zelenskyy hopes this incident will push the US to take a tougher stance on Russia.

The Bigger Picture

China’s involvement, whether direct or indirect, complicates the fragile peace efforts.

  • Beijing declared a “no-limits” partnership with Russia before the invasion.

  • The capture of Chinese fighters adds a new layer to the geopolitical tensions surrounding the war.

🇺🇸 UNITED STATES
Plans to Strike Cartels
With Drones

The Trump administration is reportedly considering drone strikes on Mexican cartels as part of its strategy to combat the fentanyl trade.

✒️ Context: The US has recently designated several Mexican cartels as terrorist organizations, leading many to believe that it green-lights the US to conduct drone strikes on them regardless of their location. But according to Colby Jenkins, the assistant defense secretary for special operations, that kind of firepower is still off the table—legally speaking.

The Plan in Motion

The administration is ramping up surveillance flights over Mexico to gather intelligence on cartel operations.

  • Discussions include targeting cartel figures, vehicles, and warehouses.

  • Mexico’s government has approved surveillance flights but hasn’t agreed to drone strikes.

  • Unilateral action without Mexico’s consent remains a possibility.

Mexico’s Response

Mexican President Claudia Sheinbaum

Mexican President Claudia Sheinbaum has firmly rejected the idea of US intervention.

  • She emphasized collaboration over interference, stating, “Mexico coordinates and collaborates, but does not subordinate itself.”

  • Sheinbaum has increased enforcement efforts since taking office, including allowing CIA surveillance flights.

The Debate

Experts and officials are divided on the potential impact of drone strikes.

  • Supporters argue military pressure could deter cartels from trafficking fentanyl.

  • Critics warn strikes could backfire politically and harm US-Mexico relations.

  • Some believe law enforcement and intelligence efforts are more effective than military action.

🇺🇸 UNITED STATES
US Accelerates
Nuclear Bomb Production

B61-12 thermonuclear gravity bomb

The US has fast-tracked the production of its latest nuclear bomb, the B61-13, seven months ahead of schedule.

With tensions rising globally, this move has sparked fears of escalating nuclear conflict.

The Bomb’s Power

This isn’t just any bomb—it’s 24 times more powerful than the one dropped on Hiroshima.

  • The B61-13 has a maximum yield of 360 kilotons.

  • Engineers at Sandia National Laboratories are leading the charge, implementing “an aggressive set of plans” to speed up production.

💡 Additional Info:

The Tsar Bomba—a Soviet hydrogen bomb with a yield of about 50,000 kilotons—remains the most powerful nuclear weapon ever detonated.

(By the way, it was supposed to be 100,000 kilotons, but it was scaled down)

But despite its sheer destructive force, it was more of a Cold War flex than a practical battlefield weapon. The bomb had to be parachuted down to give the delivery aircraft enough time to escape the blast, making it slow, highly visible, and unsuitable for modern conflict.

In contrast, the B61-13 is designed for modern warfare. With a precision-guided delivery system and a maximum yield of 360 kilotons, it can be deployed by stealth aircraft like the B-21 Raider.

Below is a video of Tsar Bomba:

Why the Rush?

It seems like the US is feeling the heat from rising tensions with Russia, China, and Iran.

  • President Trump admitted the country is in “very dangerous territory” with Iran ahead of high-level talks regarding Iran’s nuclear program.

  • NATO nations are reinforcing their nuclear defense bunkers as a precaution.

🇰🇷 SOUTH KOREA
North Intrudes Again

South Korea fired warning shots after about ten North Korean soldiers crossed the border on Tuesday. It’s the first known intrusion in nearly a year.

What Happened?

The soldiers violated the military demarcation line at the eastern section of the DMZ around 5 p.m.

  • Some of the soldiers were armed.

  • South Korea responded with warnings and fired shots, prompting the soldiers to retreat.

  • North Korea didn’t return fire, keeping the situation from escalating further.

A History of Intrusions

This isn’t the first time North Korean troops have crossed the border.

  • Last June, North Korean soldiers violated the border three times, leading to similar warning shots from South Korea.

  • Those incidents were believed to be accidental, as the soldiers were working on anti-tank barriers and planting mines.

Why Now?

However, the motive for Tuesday’s crossing isn’t clear, but South Korea’s military has some theories.

  • North Korea has been reinforcing barbed wire fences and conducting front-line works.

  • The soldiers might have unintentionally crossed the border during a patrol mission.

  • Or, could they be testing the waters to see the combat readiness of the South side?

Context

Tensions between the Koreas are already high, with North Korean leader Kim Jong Un flaunting his military nuclear capabilities and aligning with Russia.

  • The DMZ remains one of the world’s most heavily armed borders, with an estimated two million mines and countless barbed wire fences and tank traps.

  • Animosities are fueled by North Korea’s refusal to resume denuclearization talks and its confrontational stance against South Korea and the US.

    • Think of it as Iran positioned against the US at the moment. There are some parallels.

🤔 Thoughts: Remember when we talked about South Korean President Park Chung Hee (1917-1979) and his push to make Korea militarily self-reliant by developing nuclear missile capabilities?

While the idea of a brutal dictatorship wielding nukes is a nightmare for the West—and probably a lot of other countries too—it puts North Korea’s refusal to give up its nuclear arsenal into perspective. From their view, nukes are the ultimate insurance policy.

That’s Not All

Captured by Maxar on November 6, 2021, shows South Korea's Suwon Air Base south of the capital Seoul.

South Korea arrested two Chinese teenagers for illegally photographing fighter jets near Suwon Air Base. Were they spying on the Korean military on behalf of North Korea or the CCP?

  • The teens were caught snapping photos of fighter jets during flight operations at Suwon Air Base, just 21 miles south of Seoul.

  • They entered South Korea on tourist visas three days before the incident.

  • Their devices contained numerous photos of military aircraft, now undergoing forensic analysis.