The crypto market, which is often seen as a decentralized sanctuary immune to any conventional economic shocks, has found itself stuck in the web of international trade disputes.
After last week’s Trump tariffs announcement, ripples were sent through global markets, including the cryptocurrency industry.
The US president, Donald Trump, is known for his pro-crypto policies, which are seen as a positive change for crypto investors worldwide.
But now, the same investors are reconsidering their decisions to embrace President Trump as the effects of the tariff were not anticipated by anyone.
In this blog, we’ll explore the nuanced relationship between Trump’s tariffs and the crypto markets, examining both the immediate and long-term impacts of this economic policy shift.
Trump Tariffs Announcement
On 2nd April 2025, “The Liberation Day” of the United States. President Donald Trump announced long-promised “reciprocal” tariffs, which include higher rates for various countries that have trade surpluses with the United States and a baseline tax of 10% on imports from all countries.
Trump announced that the US will now charge a 34% tax on imports from China, a 20% tax on all imports from the European Union, 25% on South Korea, 24% on Japan, 32% on Taiwan & 26% on India.
The tariff announcement is a measure that included up to 125% tariffs on specific Chinese items, which was to promote domestic production and lessen dependency on imports from other countries.
The primary aim was to control the trade imbalance in the market and protect American industry. The Trump tariffs hurt various sectors, including the cryptocurrency sector.
Immediate Response of the Crypto Market to Trump’s Tariffs
When Donald Trump announced the initial tariff plan of 10% tax on universal import and 60% on all Chinese goods. The immediate reaction of the crypto market was very volatile.
- Bitcoin experienced a 12% drop in price in the first 2 days of the announcement of the tariff but also gained a 15% recovery in the next 3 days in the crypto market.
- The Ethereum price decreased by 16% in the first 1 hour to below $2700. Other altcoins like XRP, Cardano (ADA), Solana (SOL), and Dogecoin (DOGE) also faced significant losses of around 20% to 30%.
- Stablecoins saw a never-seen-before trading volume as many investors thought it would be safe to invest in these to get rid of market turbulence.
However, we saw a unique pattern of decline of the cryptocurrencies and then a quick recovery in some days, which shows how the crypto market can respond to any macroeconomic shift.
Broader Implications for the Crypto Market
The imposition of Trump Tariffs has had a ripple effect on the crypto market. As the tariffs were announced by the US President administration, the cryptocurrency market witnessed a drop of 4.86% on April 9, 2025, as per the CoinMarketCap data.
This tariff announcement affected the equity market, which further dragged the cryptocurrency market and lifted gold prices. Moreover, the market volume for crypto trade over the past few days has also decreased by 36.14% to $123.47 billion.
As for the coins, following Trump’s tariff announcement, the giant of crypto, Bitcoin saw a fall in its trading price from $83,000 to a mid-$70K range. Furthermore, over 441,000 crypto trading accounts were liquidated within 24 hours of this news.
How a single announcement affected the market across the board, tells us how deeply connected the global market structure is.
Current State of the Global Market Including Cryptocurrency
In simple terms, the current global and crypto market state following the trump tariffs imposed by the president’s administration is complex and multifaceted. Many experts gave up the idea of short-term recovery following the tariff announcement.
A hope for long-term market stability is still intact following the 90-day pause of tariffs announced by President Trump on Apr 10, 2025. However, China was excluded from this pause, and instead, the tariff rate of Chinese goods was raised to 125%.
What Does The Trump’s Tariff Pause Mean For Global Market?
For most nations, the pause of tariffs comes as a relief, however, the minimum tariff of 10% is still in place. This 10% tariff in itself is a significant change in America’s trade relationship with other nations.
This pause means that the rates above 10% will be suspended for most countries until July. For two reasons, the pause on some tariffs hasn’t had much of an impact.
First, because all US imports are still subject to the universal rate of 10%. Second, President Trump raised the tariff rate on all Chinese imports from 104% to 125% at the same time as the pause.
Even with the pause, the majority of economists believe that this constitutes a significant change in US trade policy that will hurt the world economy.
Additionally, it is anticipated that the escalation of the US trade war with China will cause more harm. The majority of other nations will suffer if both economies slow down as a result of the trade dispute.
Conclusion
President Trump’s tariffs have had serious impacts on the global market and economy. However, these tariffs might impact the cryptocurrency positively by strengthening Bitcoin in the long run.
But for now, the short-term impact of these tariffs has been witnessed in fluctuations in stock prices and a global downward shift in the market. In a different aspect, these trump tariffs showed how fragile the traditional global financial system is, and the need for a decentralized economy like crypto can’t be emphasized enough.
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FAQs
What is Trump’s tariff war?
The Trump tariffs war began in 2018, and it revolves around trade tariffs imposed by the United States on imports from China, therefore, it is also known as the China-United States Trade War.
What is Trump’s 90-day tariff?
After a week of imposing various trade tariffs on different nations, President Trump announced a 90-day pause on tariffs for these nations except China on Apr 10, 2025.
What are the Trump Tariffs on China?
The tariffs imposed by President Trump on China are further increasing to 125%, intensifying the trade war between the two nations.
Raghav is a talented content writer with a passion to create informative and interesting articles. With a degree in English Literature, Raghav possesses an inquisitive mind and a thirst for learning. Raghav is a fact enthusiast who loves to unearth fascinating facts from a wide range of subjects. He firmly believes that learning is a lifelong journey and he is constantly seeking opportunities to increase his knowledge and discover new facts. So make sure to check out Raghav’s work for a wonderful reading.
