On April 2, US President Donald Trump announced a series of new tariffs that caused significant market fluctuations and divided cryptocurrency observers about long-term impacts. At a special event at the White House, Trump signed an executive order, using emergency powers, applying retaliatory tariffs on all countries with taxes on US goods, starting at a minimum of 10%.
The long-term impact of these tariffs on the global market remains uncertain. The Trump administration's tax calculation method is unclear, causing further instability. Some believe the cryptocurrency market will boom as investors seek alternatives to traditional investments. However, the impact on mining equipment could reduce mining sector profitability.
Financial markets were volatile following the tariff news, and the cryptocurrency market was no exception. Bitcoin (BTC) price nearly reached 88,500 USD but dropped 2.6% to 83,000 USD. Ether (ETH) fell from 1,934 USD to 1,797 USD immediately after the announcement, with the total cryptocurrency market capital decreasing 5.3% to 2.7 trillion USD.
Some analysts were not concerned. Trader Michaël van de Poppe believed the tariffs were not as bad as expected. BitMEX founder Arthur Hayes noted that tariffs could reduce trade deficits but might also limit exports, potentially reducing demand for US bonds and requiring Federal Reserve intervention.
The US cryptocurrency mining industry has little reason for optimism, as prices for mining equipment, primarily imported from Asia, could increase significantly. Mitchell Askew, an analyst at Blockware Solutions, predicted equipment prices could rise 5-10 times as in 2021.
Many mining companies are rushing to import equipment before the tariffs take effect. Lauren Lin, hardware lead at Luxor Technology, revealed that the company is trying to move machinery to the US as quickly as possible.
The tariff calculation method raises many doubts. Most countries and territories on the White House list are small or have no trade with the US. Nigel Green, CEO of deVere Group, argued that Trump is disrupting the post-war global trade system.
Intending to make the US stronger, Trump asserted that tariffs would be more competitive with trading partners. However, many experts doubt the policy's effectiveness for the economy, increasing recession risks. Goldman Sachs and market bets have raised US recession predictions to 50%.
