Trump’s trade barriers and crypto bets: Rewriting the rules of global markets
I’ve been closely following the latest developments surrounding US President Donald Trump’s trade tariffs and cryptocurrency policies, especially as they unfold in 2025. The query at hand calls for a comprehensive analysis of how these policies are shaping global markets, and I’m eager to dive into the data, reflect on the implications, and offer my perspective.
With Trump’s recent announcement of heightened blanket tariffs and his administration’s surprising embrace of cryptocurrencies, the world is witnessing a fascinating interplay of protectionism and financial innovation.
Trump’s tariff escalation: A seismic shift in global trade
Let’s start with the tariffs, which have once again thrust trade tensions into the spotlight. On Thursday, in an interview with NBC News, President Trump revealed plans to ramp up blanket tariffs on most US trading partners from the current 10 per cent to a proposed 15 per cent or even 20 per cent. This escalation builds on an already aggressive trade stance, which saw the average applied US tariff rate climb to an estimated 27 per cent between January and April 2025, a level unseen in over a century.
But Trump didn’t stop there; he also singled out Canada, threatening a 35 per cent tariff on its imports starting in August, with a warning that retaliation would trigger even higher rates. This isn’t just rhetoric; it’s a calculated move to protect American industries and address trade imbalances, though the consequences are rippling far beyond US borders.
The immediate market reaction was telling. Global risk sentiment took a hit on Friday morning, with Asian equity indices trading flat and US equity futures signalling a lower open. This follows a volatile period earlier in the year when Trump’s “reciprocal tariffs,” dubbed “Liberation Day” on April 2, 2025, sent shockwaves through financial markets. Japan’s Nikkei 225, for instance, plummeted 7.8 per cent in a single day, and analysts now project a 0.8 per cent reduction in Japan’s GDP due to these measures.
Export-dependent economies like South Africa are scrambling to diversify their markets, while major trading partners, China, Canada, and the European Union, have retaliated with their own tariffs. China’s duties on US goods have soared to 125 per cent, and Canada has slapped a 25 per cent tariff on non-USMCA-compliant vehicles. This tit-for-tat escalation is fracturing global trade networks, and it’s hard not to see the parallels with the trade wars of Trump’s first term.
Economically, the tariffs are a double-edged sword. On the downside, they’ve driven up costs across the board. In the US, consumer prices rose by 2.4 per cent in 2025, with apparel prices surging 17.0 per cent and food costs increasing by 2.6 per cent. Businesses, caught in the crossfire, are passing these higher import costs onto consumers or absorbing them at the expense of profit margins.
Supply chains, already strained by years of disruption, are being forced to adapt yet again. Some companies are relocating production, others are seeking alternative suppliers, and many are simply scaling back.
The International Monetary Fund has downgraded its 2025 global growth forecast, citing these tariffs as a key factor, and there’s a growing chorus warning of a potential recession. For the US itself, estimates suggest a long-term GDP hit of up to eight per cent, a steep price to pay for protectionism.
There’s an upside, or at least an intended one. Trump’s tariffs aim to shield domestic industries, particularly manufacturing, from foreign competition. By making imported goods more expensive, the policy could stimulate domestic production and job growth.
Steel and aluminum tariffs, now at 50 per cent, and a 25 per cent duty on imported cars are designed to breathe new life into American factories. Whether this will work in practice is debatable—supply chain complexities and higher costs could offset any gains but the intent is clear. I can’t help but wonder if this is a last stand against an unstoppable tide or a genuine pivot toward self-reliance.
The cryptocurrency boom: Trump’s unexpected ally
Now, let’s pivot to a very different story: Trump’s embrace of cryptocurrencies, which has sent shockwaves of another type through global markets. On Thursday, Bitcoin hit an all-time high of US$116,046.44, breaking its earlier record of US$113,734.64, and it’s up 24 per cent for the year. This rally isn’t just a fluke. It’s fuelled by a combination of institutional demand and a policy shift that’s caught many by surprise.
Back in March 2025, Trump signed an executive order establishing a strategic reserve of cryptocurrencies, a bold signal that the US government is no longer just tolerating digital assets but actively endorsing them. Add to that the appointment of crypto-friendly figures like SEC Commissioner Paul Atkins and White House AI czar David Sacks, and you’ve got a regulatory environment that’s rolling out the red carpet for blockchain innovation.
The drivers behind this surge are multifaceted. A weakening US dollar, with the Dollar Index hovering at 97.576, has investors seeking alternatives. Global liquidity is abundant, and institutional capital is pouring in, think hedge funds, pension funds, and even banks jumping on the crypto bandwagon.
Galaxy’s analysis of market dynamics since June 2025 points to geopolitical conflicts and economic uncertainty as catalysts, with Bitcoin emerging as a standout performer. When Trump’s tariff announcement briefly sent Bitcoin below US$76,000 amid a broader risk-off move, it quickly rebounded, underscoring its resilience. Binance CEO Richard Teng and VanEck’s Mathew Sigel are bullish, suggesting Bitcoin could become a reserve asset if the dollar’s dominance wanes further.
For global markets, this is a game-changer. Cryptocurrencies are no longer a fringe experiment. They’re increasingly seen as a hedge against traditional market risks. Gold, up 0.3 per cent to US$3,324.63 per ounce, is still a safe haven, but Bitcoin’s meteoric rise suggests it’s stealing some of that thunder.
The potential is enormous: greater adoption could drive financial inclusion, spur innovation, and even reshape cross-border trade. Imagine a world where businesses use crypto to bypass tariff-laden banking systems, cutting costs and speeding up transactions.
However, there are risks as well; volatility remains a hallmark of the market, and regulatory gaps leave room for fraud and manipulation. Plus, the energy demands of crypto mining are a growing environmental headache, something I’ve seen spark heated, albeit with less focus than it deserves.
The interplay: Tariffs meet crypto in a global tug-of-war
Here’s where it gets really interesting: how do tariffs and cryptocurrencies interact? At first glance, they seem like opposites—one rooted in old-school protectionism, the other a symbol of borderless innovation. But dig deeper, and there’s a fascinating dynamic at play. The economic uncertainty sparked by tariffs could be turbocharging crypto’s appeal.
When trade tensions flare and markets wobble, as seen in Friday’s retreat in global risk sentiment, investors often look for hedges. Bitcoin’s decentralised nature, unbound by any single economy, makes it an attractive refuge. I’ve seen this before, during the 2018-2019 US-China trade war, when Bitcoin surged as traditional assets faltered. In 2025, with tariffs hitting harder, that pattern could intensify.
Conversely, crypto might soften the tariffs’ blow. If businesses adopt blockchain for cross-border payments, they could sidestep some of the costs and delays tied to traditional finance. A US importer facing a 20 per cent tariff on goods might use crypto to settle with a supplier faster and cheaper, easing the sting.
But let’s not overstate this, crypto’s still young, and its scale is limited. Most trade still flows through banks, and regulatory hurdles loom large. Additionally, the tariffs could indirectly harm crypto; higher costs for imported mining equipment from China, for instance, might squeeze miners and developers.
If I had to bet, I’d say crypto’s rise will outlast the tariff storm, though not without a wild ride.
