In recent weeks, the administration of President Donald Trump has restarted the trade war with China by imposing import tariffs of up to 145% on many goods from the world's second-largest economy. In response, China has also launched strong countermeasures, causing global supply chains to continue to be disrupted and commodity costs to soar.
As a result, the global economy is facing a clear risk of recession: the IMF has lowered its global growth forecast to 2.8%, while analysts warn that US GDP could decline by 6% if the trade war continues. Inflation is rising, consumption is weakening, and the risk of goods shortages may return as during the pandemic.
Not outside of that vortex, the cryptocurrency market has witnessed a strong sell-off right after Trump announced new tax policies. Ethereum (ETH) dropped more than 20% in a few days, leading to a wave of liquidations exceeding 2.2 billion USD across the market. Despite some slight recovery signals when Trump indicated he would 'pause' some taxes, investor sentiment remains skeptical and cautious.
Trump's continued use of tariffs as a bargaining tool not only destabilizes traditional markets but also puts risk assets like crypto in a difficult position. Ethereum – one of the largest blockchains in the world – is facing dual pressures: from the macroeconomic environment to declining investment flows.
In summary: Trump's trade policy is creating a 'shockwave' for both the traditional financial world and the digital asset space. If the trade war continues to escalate, Ethereum may lose further recovery momentum, while investors should be extremely cautious and closely monitor all major global political-economic developments.