Hey, coin friends, April 2 is coming soon, and Trump's tariff policy is finally going to land! As a "tariff man", he will wield a big stick again this time, throwing a wave of shock waves on the global economy and the cryptocurrency market. Today, let's talk about how this will stir up the world economy and the cryptocurrency circle!
What's the situation with the tariff policy?
First, let's briefly highlight the key points: the core of Trump's "reciprocal tariff" policy this time is "tit for tat". That means that which country charges a certain amount of tax on American goods, he will charge the same tax rate on other countries' imported goods, and even increase it. According to reports, since February, he has already imposed a 25% tariff on Canada and Mexico, and a 10% tariff on China. Now on April 2, the details of the global reciprocal tariff will be officially finalized. This is not a small fight. There are many countries involved and the scope is wide, so the impact is naturally far-reaching.
Trump’s logic is simple: the United States has suffered a loss, so it must pull back the manufacturing industry and collect more taxes to fill the treasury. He thinks he is an "economic hero", but many experts shake their heads and say that this move may make American consumers' wallets shrink faster and may also drag global trade into a quagmire.
World economy: a head-on tug-of-war
Let’s talk about the world economy first. Once the tariffs are implemented, the supply chain will be the first to bear the brunt. Imagine that the imported beef and coffee beans in the supermarket near your home suddenly became 25% more expensive. Would you curse? American consumers will most likely face this situation. The Peterson Institute for International Economics has calculated that Trump’s new tariffs may cost American middle-income families an extra $1,700 to $3,900 per year. This is not the end. If inflation rises, the Federal Reserve will be under greater pressure to raise interest rates. Once interest rates rise, the stock market and the housing market will have to tremble.
Let’s look at the global side. China, Canada, Mexico and other countries named are not pushovers and have long threatened to fight back. China has already imposed tariffs on US coal, natural gas and cars, and Mexico and Canada are also preparing for retaliatory tariffs. Isn't this the Trade War 2.0? Global trade volume has already been stretched tight enough due to the pandemic and geopolitics. With this, analysts predict that global trade growth may turn from slightly positive to negative in 2025. Cheng Xiaoyong's words are quite accurate: "With insufficient demand and high debt in various countries, economic recovery will be even more impossible once a trade war is launched."
However, don't think too much about this. Trump likes to keep his hands back. Tariffs look fierce, but they are often bargaining chips. For example, he shouted at Canada and Mexico before, and the two countries quickly sent more border guards, and the tariffs were suspended for 30 days. He also spread the word that he would visit China to discuss trade, fentanyl and so on. Therefore, this wave of tariffs may be "much ado about nothing", and the key lies in how countries respond.
Cryptocurrency: safe haven or a beating?
Let's talk about our cryptocurrency circle. The impact of the tariff policy on cryptocurrency is actually quite two-sided. On the one hand, once the global economy is in chaos, risk aversion will rise, and "digital gold" such as Bitcoin may be hyped. After Trump took office, Bitcoin has already rushed to $140,000, which is inseparable from his support for cryptocurrency. He also created a "Trump coin" ($TRUMP), and its market value once soared to $14.7 billion. Although it has now fallen to $7.5 billion, it is still hot. Not to mention that he also wants to pull Bitcoin and ETH into the national reserves. Once this policy is released, the cryptocurrency circle is directly excited.
But don't be too happy too soon, the tariff war also has a dark side. If the trade war drags down the global economy, US inflation soars, and the US dollar strengthens, cryptocurrencies may be squeezed. After all, the cryptocurrency circle is not completely decoupled from traditional finance. Once the US stock market falls, Bitcoin will also follow. What's more, if Trump really raises the tariff to 60% (he said this during the election), cross-border e-commerce and supply chains will be in chaos. Platforms like Temu and Shein that rely on low prices to increase sales may be out of business, and tokens in the cryptocurrency circle that are linked to e-commerce will also suffer.
There is another thing to mention: Although Trump's attitude towards encryption is friendly, his policy uncertainty is too high. He may praise you to the sky today, but he may turn his face tomorrow. Cryptocurrency players should be more cautious and don't just go all in when he shouts slogans.
Who is the winner and who is the loser?
In short, when the tariffs are implemented on April 2, the world economy is likely to be "some are happy and some are sad". The United States may collect some tariffs in the short term, and manufacturing will return a little, but consumers will have to pay more, and the risk of inflation cannot be avoided. On the Chinese side, exports may be frustrated, but the supply chain has long been running to Vietnam and India, so it may not be a serious blow. Neighbors like Canada and Mexico may be more troubled, as the 25% tariff is no joke.
What about the cryptocurrency world? Bullish in the short term, because of the safe-haven demand and Trump's "pro-cryptocurrency" halo. But in the long run, if the global economy is really destroyed by the trade war, the cryptocurrency world will not be able to escape systemic risks. So, don't just stare at the candlestick chart, but look at the macro side. Trump's tariffs are like throwing a big stone into the pot of global economic soup, and everyone will be affected by the splashes. What can ordinary people do? Keep an eye on the news, don't follow the trend blindly, and keep your wallet tight. As for what will happen on April 2, let's wait and see. Anyway, the show has just begun, and the excitement is yet to come!
Kikyo
Catherine