China has fired back at the U.S. with its own set of tariffs, marking another chapter in the escalating global trade conflict that began with President Donald Trump’s tariff announcement on April 2.
China’s decision to impose a 34% tariff on all U.S. imports from April 10 has rattled markets, especially as Trump’s initial move targeted Chinese goods with the same rate. The Chinese Finance Ministry urged the U.S. to reconsider, calling for a more cooperative approach to trade disputes.
The news hit the crypto market hard, with Bitcoin experiencing a sudden drop from $84,000 to just under $82,000. This dip reflects a broader sense of uncertainty as the global economic standoff intensifies. The ripple effect has been felt beyond crypto, with the stock market taking an even heavier blow—particularly the S&P 500, which shed more than $1.5 trillion in value upon reopening.
Some analysts are trying to gauge how these developments might shape the crypto landscape. Kevin Capital, a well-known figure in the crypto community, believes digital assets could weather the storm better than traditional markets. His reasoning centers on how cryptocurrencies respond more to monetary policy than direct trade issues. He points out that expectations of Federal Reserve rate cuts have kept the crypto sector relatively stable compared to stocks.
However, Capital warns that if Federal Reserve Chair Jerome Powell dismisses the likelihood of rate cuts, crypto could quickly align with the plunging stock market. On the other hand, if Powell hints at easing measures, the upcoming CPI report could spark renewed investor confidence.
Interestingly, Bitcoin did manage a brief recovery after strong U.S. job data, suggesting that macroeconomic factors might outweigh trade concerns. Meanwhile, European Commission President Ursula von der Leyen signaled that the EU might retaliate if talks with the U.S. stall, adding another layer of complexity to the already tense economic landscape.
While the situation remains fluid, the crypto market’s relative stability amidst the chaos hints at a complex relationship between economic policies and digital assets. Still, the threat of further volatility looms as global trade tensions continue to rise.
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