In recent weeks, President Donald Trump's administration has re-ignited the trade war with China by imposing tariffs of up to 145% on many items from the world's second-largest economy. In response, China has also launched strong retaliatory measures, causing global supply chains to continue to be disrupted and the cost of goods to rise.
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 the US GDP could decline by 6% if the trade war continues. Inflation is rising, consumer spending is weakening, and the risk of shortages of goods may return as during the pandemic.
Not outside this vortex, the cryptocurrency market witnessed a strong sell-off immediately after Trump announced the new tax policy. Ethereum (ETH) dropped more than 20% in just a few days, leading to a wave of liquidations totaling over $2.2 billion across the market. Although there were slight recovery signals when Trump hinted at a 'temporary pause' on 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 risky assets like crypto in a difficult position. Ethereum – one of the largest blockchains in the world – is facing double pressure: from the macroeconomic environment to declining investment flows.
Summary: Trump's trade policy is creating a 'shockwave' for both traditional financial markets and the digital asset space. If the trade war continues to escalate, Ethereum may lose additional momentum in its recovery, while investors should exercise great caution and closely monitor all significant global political and economic developments.