The latest on Donald Trump's tariffs:
Updates and deadlines on tariffs:
* Threat of new tariffs: On April 2, 2025, Trump announced new tariffs, including a base tariff of 10% on all countries. Subsequently, on July 7, 2025, he imposed a 25% tax on imported goods from Japan and South Korea, and new tariffs for a dozen other nations.
* Deadline extension: Initially, these tariffs were set to take effect on July 9, 2025, but Trump has extended the deadline for negotiations until August 1, 2025. This means that letters to the affected countries, specifying their tariff rates, are already being sent, granting additional time to reach agreements.
* Possible flexibility: Although August 1 has been set as the new deadline, Trump has indicated that he could be flexible with this timeline, adding a layer of uncertainty.
* Additional tariffs for aligning with BRICS: Trump has also threatened an additional 10% tariff on countries that align with the "anti-American" policies of BRICS nations.
Impact on the traditional economy:
* Market volatility: The re-emergence of tariff concerns has caused a pause in the stock market. The S&P 500, Dow, and Nasdaq have all experienced declines.
* Risk of economic slowdown: Higher taxes on imported goods could hinder economic growth and increase recession risks.
* Inflation: Tariffs increase the cost of imported goods, which can contribute to inflation. The Fed Chairman, Jerome Powell, has indicated that the central bank is waiting to see how Trump's tariffs affect the economy and inflation before making decisions about interest rates.
* Trade negotiations: The goal of these tariffs is to pressure trading partners into reaching new agreements with the United States.
Impact on cryptocurrency markets:
* Safe haven or volatility: Uncertainty in the traditional economy often translates into volatility for risk assets, including cryptocurrencies. However, as you mention, some see them as a safe haven.
* Sensitivity to economic policy: Although cryptocurrencies are not directly taxed by tariffs, they are sensitive to the indirect effects of economic policies.
* Interest in non-sovereign assets: Tariffs may increase investor interest in non-sovereign assets like Bitcoin or stablecoins, especially if there is a decline in confidence in fiat currencies or geopolitical instability.
* Trading volume: A report from Kaiko indicated that cryptocurrency trading volumes decreased in the first quarter of 2025 due to tariff uncertainty, although Bitcoin outperformed most altcoins during this period.
* Bitcoin as "digital gold": Some argue that Bitcoin's scarcity makes it a resilient option against inflation, similar to gold. However, its volatility still generates debate about its effectiveness as a hedge.
In summary, the situation regarding Trump's tariffs remains dynamic, with shifting deadlines and ongoing negotiations. It is an important macroeconomic factor that cryptocurrency investors are closely monitoring, as it can create both opportunities from volatility and a search for refuge in alternative assets.
THANK YOU FOR READING.
IF YOU FOLLOW ME, I WILL FOLLOW YOU BACK.
