Among all the different countries that has been hit by President Trump's tariffs, it seems that everyone is always focusing their attention on that one country-China.

On April 2, President Trump announced that the U.S would be implementing a reciprocal import tariff on China, and this news sent shockwaves through the global economy and also the crypto markets. The measure would include a 10% baseline tariff on all imported goods, with higher levies such as a 34% tariff on Chinese imports, set to begin today.

In response to U.S tariffs, China has also imposed a 34% tariff on all U.S imports effective April 10, according to reports by Chinese media Xinhua News. China also declared "war" by stating that it would be fighting against Trump's tariff until the bitter end.

With both countries unwilling to back down, it seems that both countries has reached an impass, and a resolution remains unlikely in the short term.

So what would the China-U.S tariff war mean for the rest of the world, and how would a potential resolution signal a potential rebound for the crypto market?

Trade war wars pivoted on China

Experts have made the bold speculation that Trump's entire tariff wars is actually pivoted around China, with Trump using countries such as Canada and Mexico as a bargaining chips to negotiate with China.

Paoul Pal, founder and CEO of Global Macro Investors wrote on his X that in the end, almost all the other tariff negotiations and rhetoric are all about getting China to agree a deal.

"That is a big prize and both China and the U.S understand it and need it. Everything is negotiation posturing. China needs a weaker $ and the U.S needs tariffs."

Pal adds that the U.S is also trying to use other countries such as Mexico and Vietnam to shut down China's tariff arbitrage. This suggests that the current negotiations are part of a broader strategy to exert pressure on Beijing while protecting US economic interests.

But it seems that China also has no intentions of backing down. China’s strong stance in these negotiations is underpinned by its position as the world’s largest trading nation.

Since surpassing $4 trillion in goods trade in 2012, China has maintained its dominance in global commerce, overtaking the US in total export and import value. This economic clout gives Beijing significant leverage in its ongoing trade dispute with Washington.

So it seems that the ongoing tariff negotiations are less about economic warfare and more about securing a strategic agreement with China. This development comes as investors remain on edge, closely monitoring the impact of escalating tariffs on both traditional and cryptocurrency markets.

A resolution could signal a crypto market recovery

The release of Trump's recent tariff has caused the crypto market to crash. Not only has the price of Bitcoin fell to an all-time low over the weekend following Trump's reciprocal tariff announcement, the price of Ether and Solana has also fell by 15% and 13% respectively.

The tariff war has also triggered a massive wave of liquidation, where rattled investors were quick to offload the cryptocurrency on their hand to avoid further market carnage following the economic uncertainty.

The outcome of the negotiations between China and the U.S is being closely watched by cryptocurrency markets, which have been significantly impacted by global trade tensions. Analysts suggest that a resolution between the two superpowers could serve as a much-needed catalyst for recovery in digital asset markets.

According to Nansen analysts, there is a 70% chance that crypto markets will bottom out by June 2025 before beginning their recovery. Nicolai Sondergaard, a research analyst at Nansen, highlighted how investor sentiment toward risk assets like Bitcoin hinges on global tariff developments.

Speaking during Cointelegraph’s Chainreaction live show on X, Sondergaard said, “We have reached somewhat of a local bottom in regard to tariffs and their impact on prices.” He further added that while Trump’s aggressive stance has largely played out, other countries’ responses will be crucial in determining whether global trade tensions ease or escalate further.

The Road Ahead

As both nations continue their high-stakes negotiations, the global financial landscape hangs in the balance. While some, like Raoul Pal, remain optimistic about an eventual deal between the US and China, short-term volatility seems inevitable. For now, all eyes remain fixed on how these tariff battles will shape not only traditional markets but also the future trajectory of cryptocurrencies.