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Crypto Market Rallies as Trump Hits Pause on Some Tariffs, Intensifies Pressure on China
- Trump ordered a 90-day pause on increased tariffs, lowering the baseline rate to 10%, while maintaining 125% tariffs against China.
- The S&P 500 gained almost 10%, while Bitcoin rose 8% and Ethereum and XRP increased by 12% and 13% respectively.
- Trump expects negotiations with China, but Chinese officials emphasised they won’t back down from “bullying practices” and demand mutual respect.
Donald Trump has put a pause on some of his sweeping tariffs, and markets have welcomed the move. The S&P 500 is up almost 10% over the past day, and the Nasdaq and other major indices have followed.
Meanwhile, Bitcoin has rallied 8%, while Ethereum and XRP gained 12% and 13% respectively.
While that’s good news, it’s basically just a reversal of the downtrend over the past few days, following a series of crashes. At the time of writing BTC is trading for US$82,361, still a 6% gain from where it was just a month ago.
Related: European Financial Regulator Warns of Rising Crypto Threat to Financial Stability
The Latest on Trump’s Tariffs
It has been a stomach-churning couple of days, especially if you’ve looked at your super (or 401(k) for those in the US) balance or kept an eye on the Bitcoin price.
So, what is happening with the tariff saga that Trump has started? After false rumours that he would put a pause on the tariffs, he slapped 104% on China which retaliated with a 84% levy on US imports into the East-Asian nation.
And now the pause has become official, with the US President saying:
I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.
Donald Trump So, while markets now are in recovery mode, here’s what Trump’s latest decisions are:
- a 125% tariff on China.
- a 90 day pause on higher tariffs. (Countries affected by the recent increase in reciprocal duties will now return to the previous 10% baseline tariff rate that applies to other nations, except for China.)
- levies on steel, aluminium and cars remain in place.
- 25% tariffs on Canada and Mexico also remain in place, except for goods covered by the North American trade pact.
According to Trump, over 75 nations got in touch with his administration and “have not, at my strong suggestion, retaliated in any way, shape, or form”.
Trump Says China Will Come to Negotiation Table Soon
Regarding China, Trump believes they’ll come around eventually:
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President Xi is a proud man I know very well. And they don’t know quite how to go about it, but they’ll figure it out in the process of figuring out. But they want to make a deal.
Donald Trump However, it’s unclear if China will indeed yield to US pressure, as it has said to fight Trump’s tariffs.
A spokesman for China’s foreign ministry, Lin Jian, said the country won’t back down from what they see as “bullying practices” by the US, adding that the United States needs to display “an attitude of equality, mutual respect, and reciprocity”, to end the standoff.
Author
Aaron Feuerstein
Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.
