What Is TARIFF? (Today, Wednesday, April 2nd, is the TARIFF announcement)
What exactly is a tariff? Why has the crypto market been declining due to it, and why is gold surging?
Since former President Trump took the oath of office, the tariff battle between multiple countries has intensified. But what is a tariff, and how does it work?
In simple terms, a tariff is an import or export tax. When one country trades with another, additional charges imposed on goods are called tariffs.
For example, if Pakistan imports a product from the U.S. and there is a 5% tariff, everything proceeds as usual. However, if the U.S. suddenly announces a 20% tariff, it becomes a financial burden for Pakistan. More money is drained from the national treasury, and to compensate, the government increases taxes on the public, affecting the entire economic system.
Recently, President Trump has imposed tariffs on several countries. In retaliation, some of these countries have also imposed tariffs on the U.S., leading to significant financial shocks even for America itself.
Today, on Wednesday, Trump is expected to announce new tariffs, making this a crucial day and event for the market.
It is important to note that the U.S. is considering imposing tariffs on more than 25 countries. In response, nations like China, Japan, and others are planning retaliatory tariffs against the U.S. If multiple countries unite against America with tariffs, it could deal a severe economic blow to the U.S.
It is worth remembering that this tariff war was initiated by Trump himself, and it may ultimately backfire on him.
Now, how does this relate to crypto and gold? When a country is hit with tariffs, it must pay additional taxes. To do so, it may liquidate assets such as Bitcoin or stock investments to generate funds. As a result, major investors in that country panic and start selling their assets to avoid losses, triggering market dumps.
I hope this explanation clarifies what tariffs are and how they impact the market.
