In recent weeks, we have seen how Donald Trump has reignited tariff rhetoric with promises to impose massive tariffs on Chinese and European products. The public debate has focused, as usual, on whether this responds to a protectionist, electoral strategy, or simply populism. But the truth is that very few are seeing the essential: this has nothing to do with international trade. It has to do with the cost of debt.
The United States faces a silent but monumental economic challenge: more than 9 trillion dollars in Treasury bonds will mature before the end of 2026. Most were issued during the years of near-zero interest rates. Today, the landscape is different. With the yield on the 10-year bond still above 4%, refinancing that debt will not be cheap.
So, what is the only realistic way to lower those yields? Cool down the economy. Induce a controlled recession. Slow down growth, reduce inflationary pressure, suppress capital demand. All to be able to refinance more cheaply. And that is precisely what we are witnessing under the guise of a 'trade war.'
Tariffs alone do not solve anything. But as a tool to reduce long-term growth expectations, they are extremely effective. The same can be said for 'economic nationalism' and other measures that, at first glance, seem irrational. The true objective is not immediate economic, but structural financial.
The impact is already being felt in the markets most vulnerable to liquidity: cryptocurrencies. Bitcoin, Ethereum, and other digital assets have fallen between 15% and 30% so far this year. And it is not because the Web3 ecosystem has lost relevance or technological value, but because economic policy has changed phases.
At this moment, the priority is not growth, but control. The Federal Reserve continues to reduce its balance sheet, and stimulus is far from returning. Until this refinancing cycle is completed, money will be scarce, risk will be penalized, and financial innovation — like that represented by the crypto world — will have to endure a forced winter.
It is most likely that, once this process is over, the cycle will reverse. Stimulus will return, the appetite for risk assets will return, and perhaps another financial rally like that of 2020–2021. But not before. First, the yield curve must be controlled.
That is why I insist: this is not a trade war. It is a war of yields.
And understanding it is key to anticipating what is to come, especially in markets like crypto, where price responds not only to technology but to the global monetary environment.
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