The global economic landscape faces heightened tension as U.S. President Donald Trump has warned of a potential 50% tariff on Chinese imports if the country does not withdraw its retaliatory tariff of 34% against the United States. This escalated trade dispute has raised concerns among economists, particularly regarding its impact on the crypto market, which has already been reeling from a broader market downturn.
On Monday, Trump threatened China with a substantial tariff increase, signaling severe economic repercussions. “Any country that plans to go against the U.S. by issuing additional tariffs will be considered as abusing our nation,” Trump posted on the Truth Social app, further emphasizing that the U.S. would impose the 50% tariff if China did not back down by April 8, 2025. This tariff war, which began on April 2, 2025, with the imposition of a 34% tariff on Chinese imports, has created a volatile atmosphere in global markets. China, in turn, has announced plans to retaliate with its own 34% tariff on U.S. products starting April 10, 2025.
The economic fallout from such a trade war is already being felt. Wall Street has experienced significant losses, with reports indicating that the stock market has lost trillions in value since the tariff conflict began. Experts predict that, if unresolved, these tensions could lead to a potential recession, further dampening investor sentiment across markets, including cryptocurrencies.
According to Larry Fink, CEO of BlackRock, the U.S. may already be in a recession, a statement that has raised alarms about the future of both traditional financial markets and the cryptocurrency sector. As tariffs push consumer prices higher, inflation could spiral, undermining economic growth and causing further instability in risk assets, including cryptocurrencies.
Crypto markets, which often mirror broader economic conditions, could experience severe declines if the tariff conflict deepens. The uncertainty created by such high stakes in the global trade war could drive investors to pull out of riskier assets like crypto, exacerbating an already volatile environment. If tariffs escalate, the crypto market could bleed even more, potentially leading to a significant loss in market capitalization as investor confidence erodes.
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