Tariff Policy Triggers Market Meltdown
The tariff policy crisis began on April 3 when Trump announced a 20% tariff on all imports, plus a 30% punitive levy on 185 “unfair trade” nations—far beyond the anticipated 10%-15%. China retaliated on April 5 with a 40% tariff on U.S. goods, and the EU plans a 25% levy on American tech products. Global trade war panic sparked a sell-off, pushing the Dollar Index (DXY) to 102—a six-month peak—while 10-year Treasury yields fell to 2.3%. Gold soared past $2,800 per ounce, a record high.
U.S. stocks suffered a “Black Friday.” The Dow Jones Industrial Average crashed 2,500 points, down 10%, and the Nasdaq dropped 8.2%, entering bear market territory. Tech giants Apple (AAPL) and Tesla (TSLA) lost 12% and 15%, respectively, while Boeing (BA) shed 18% in two days. The S&P 500’s $6 trillion wipeout marked 2025’s worst weekly loss. Cryptocurrency markets followed: Bitcoin hit $74,500, losing $250 billion in market cap, with Ethereum (ETH) below $3,000 (down 10%) and altcoins like XRP and Solana down 12%-15%.
“The tariff policy caught markets off guard,” said Goldman Sachs Chief Strategist Erin Brown. “We now see a 60% chance of a 2025 global recession, with the S&P 500 potentially dipping below 4,000.”
Tariff Policy Sinks Bitcoin: Crypto’s Safe-Haven Myth Fades
The tariff policy hammered cryptocurrency prices, driven by a surging dollar and risk-off sentiment. As tariffs boosted safe-haven demand, the dollar’s rise crushed dollar-priced assets like Bitcoin. Fed Chair Jerome Powell’s Friday comments—noting the tariff policy could raise inflation and slow growth but deferring action—fueled uncertainty.
“Bitcoin’s ‘inflation hedge’ status is crumbling under the tariff policy,” said Chainalysis analyst Michael Lee. “It’s acting like a risk asset, and $70,000 may be next.” Still, Bitwise’s James Hall sees a floor near $74,500, noting, “Institutions could buy between $72,000 and $75,000 if Trump steps in.”
Global Fallout from Tariff Policy
Trump’s Tariff Policy Countermeasures: Revival in Sight?
As the tariff policy wreaks havoc, Trump may act fast to fulfill promises of “reviving the U.S. economy” and “building a crypto capital.” Predicted moves include:
- Reviving U.S. Stocks
- Tax Cuts and Deregulation: A new corporate tax cut from 21% to 15% could ease tariff policy costs for manufacturers and tech firms, paired with lighter financial and environmental rules to lift U.S. stocks.
- Infrastructure Push: A $1 trillion plan for energy and transport could boost stocks like Caterpillar and Boeing.
- Projected Impact: With Congressional approval, the S&P 500 might rebound 3%-5% in two weeks.
- Boosting Cryptocurrency Markets
- Bitcoin Reserve: Trump’s pledged “strategic Bitcoin reserve” using 200,000 BTC ($15 billion) could launch at a White House summit, with Treasury buys to lift cryptocurrency prices.
- Tax and Regulatory Breaks: Tax exemptions on crypto gains under $100,000 and an SEC enforcement pause could spur growth.
- Projected Impact: Bitcoin might hit $80,000 short-term, possibly $95,000-$100,000 by year-end.
- Easing Tariff Policy Tensions
- A “pressure-then-deal” approach could see Trump negotiate with China and the EU, trimming tariffs for concessions to calm recession fears.
- Projected Impact: Talks could add 2%-3% to the S&P 500 and Bitcoin, softening the dollar.
Tariff Policy Outlook: Chaos or Recovery?
Trump adviser Kevin Hassett calls the tariff policy a “vital step for U.S. manufacturing,” downplaying volatility as “short-term pain.” Yet, Goldman Sachs warns of a 1.5% 2025 GDP growth if trade tensions persist, with Bitcoin at risk below $70,000. Optimists see hope: “A Bitcoin reserve could spark a rally from $72,000-$75,000,” Hall predicts, while JPMorgan eyes infrastructure stocks as early winners.
Next week’s CPI (April 10) and U.S.-China talks loom large. Trump’s response will decide if markets recover or sink deeper.
