On April 2, 2025, Trump's "reciprocal tariff" policy will heavily land, and this "bomb" is about to trigger a global economic and crypto market tsunami. Trump's "reciprocal tariff" policy is simple and brutal: whatever tax you impose on me, I will impose the same on you. If this policy truly takes effect, the world economy and crypto market will both shake.
Impact of Trump's Tariff Policy on the World Economy
According to the latest news, in February 2025, Trump has imposed a 25% tariff on Canadian and Mexican goods, and added a 10% tariff on Chinese goods. On April 2, he will finalize the details of global reciprocal tariffs. This is no small matter, involving countries from G7 allies to emerging markets, and goods from beef and cars to high-tech components, with none spared. Trump's calculation is straightforward: first, to bring manufacturing back to the US, second, to collect more tariffs to fill fiscal holes, and third, to use tariffs as a negotiation chip to force other countries to compromise.
But can this strategy work as he wishes? Many economists are skeptical, pointing out that US consumers might be the first to suffer. The Peterson Institute for International Economics estimates that new tariffs could cost middle-income US households an additional $1,700-$3,900 per year, with inflation pressure rising accordingly. Globally, China, Canada, and Mexico have already shown their countermeasures, with China imposing a 15% tax on US coal and natural gas, and a 10% tax on automobiles, suggesting a hard-hitting trade war is imminent.
With tariffs in place, how will the global economy fare? Supply chains will be the first to be impacted. The imported beef you eat, coffee you drink, and pickup truck you drive might suddenly become 25% more expensive. This is not an exaggeration; price increases for imported goods in the US are almost certain. A 2024 University of Chicago survey showed that 98% of economists believe tariff costs will ultimately be passed on to domestic consumers, manifesting as price increases. With inflation rising and consumption shrinking, how can the economy continue to run?
More troublingly, global trade might fall into a deep pit. The International Monetary Fund (IMF) predicts that if Trump's tariffs are fully implemented, global economic output could shrink by 0.8% in 2025, and even worse, by 1.3% in 2026. Behind this is the chain reaction of Trade War 2.0: weakened global demand, high debt, and disrupted supply chains, making economic recovery hopes increasingly dim. Chinese economist Cheng Xiaoyong pointedly said: "Once a trade war breaks out, global trade will shift from slight positive growth to negative growth, with recovery basically impossible."
However, Trump is not inflexible. He loves to leave room for maneuver, and tariffs are often a negotiation tool with more bark than bite. For example, the 25% tariff on Canada and Mexico in February was loud, but after both countries increased border patrols, he immediately softened for 30 days. For China, he has also hinted at a potential visit to discuss trade, fentanyl, and other issues. Therefore, the actual implementation of these tariffs may depend on how other countries respond and whether they can give him enough face at the negotiating table.
Current Status and Characteristics of the Crypto Market
- Short-term: Crypto prices on a roller coaster, sentiment matters more than technology
As soon as the tariff policy lands, the crypto market will enter "roller coaster mode". For instance, when Trump announced the tax increase, Bitcoin dropped 10% in 24 hours, and Ethereum performed even worse, falling 15%. Why? When the global economy is in chaos, investors panic, and risk assets are the first to be sold off, and our coins are no exception.
But the plot can quickly reverse. In early March, Trump hinted at including Bitcoin, Ethereum, and five other coins (including XRP, SOL, ADA) in US reserves, and the crypto world instantly boiled! Bitcoin rose 15% in hours, Ethereum 12%, and XRP even soared 30%. What does this show? Market sentiment matters more than technical indicators, and Trump's words can make capital flow rapidly. So in the short term, watching policy trends is more reliable than watching K-lines.
Trading volume is also quite active. As soon as the tariff news broke, market trading volume increased by 50% in a week, with a selling wave; when the reserve statement landed, $5 billion flowed in within three days, and buying became the main theme again. Conclusion? Short-term volatility is inevitable; the bold can catch the waves, while the timid should hold onto their wallets.
- Long-term: Safe haven or bubble, key points to consider
Looking further ahead, how will the tariff policy affect the crypto market? First, let's discuss the safe-haven attribute. Theoretically, Bitcoin, the "digital gold", should be valuable in economic turmoil, being decentralized and not backed by any government. But in reality? When the market panics and liquidity needs rise, coin prices still fall. So whether this safe-haven hat can be worn firmly depends on whether the global economy truly collapses - if it does, everyone might huddle together; if not, coin prices might still dive with the stock market.
Regulation is another major variable. Tariffs disrupting the economy might lead governments to tighten financial controls, forcing crypto exchanges to comply, with compliance costs skyrocketing. But if Trump truly sees Bitcoin as a treasure, US regulation might loosen, Bitcoin ETF approvals might accelerate, and institutional funds could pour in. What would happen then? The market would become more mature, but bubble risks would also need prevention.
Specifically for the industry, mining will be the first to be affected. Tariffs will push up energy prices, making life difficult for US miners, with small factories possibly closing directly. Large factories? They're already packing to move to countries like Russia and Kazakhstan with cheaper electricity. This migration will redraw the global mining map, with mining machine manufacturers and mining operators needing to adjust accordingly.
Crypto exchanges will see a different scenario. With coin price fluctuations, trading volume will surge, with mainstream platforms becoming so busy that their servers might stall. But risks are also numerous; with price volatility, credit risks and market manipulation must be guarded against. In the future, exchanges will need to invest in system upgrades, or user experience will suffer, and reputation could be lost.
Blockchain applications also have potential. Tariffs raising cross-border trade costs, blockchain can help reduce expenses and improve efficiency. Coins like XRP, specializing in cross-border payments, might see a spring. However, with economic chaos, enterprises might become less bold in trying new technologies, making promotion less smooth.
Finally, let's discuss investment strategies. The tariff situation is not over, and the global economy will continue to shake. The crypto market has many opportunities, but also deep pitfalls. Recommendations:
- Watch the big picture: Policy trends are more critical than technical aspects, read more news, don't just look at charts.
- Diversify risks: Don't put all eggs in crypto, gold and bonds can also stabilize your position.
- Choose platforms wisely: Use reputable crypto exchanges to prevent hackers from stealing.
- Maintain a balanced mindset: Volatility is a feast, don't get cocky when winning, don't panic when losing.
In summary, Trump's tariff policy is a double-edged sword, with short-term sentiment driving and long-term trends yet to be determined. As crypto players, we must seize opportunities while preventing risks. How do you view this market trend?
