How Tariffs Crash Markets
1. Trade Wars
When countries impose tariffs on each other’s goods (like the U.S.-China trade war), it raises the cost of imports and exports. This causes:
Higher prices for consumers
Lower profits for businesses
Supply chain disruptions
Investors don’t like uncertainty, so they pull money out of the market, causing it to fall.
2. Global Economic Slowdown
Tariffs slow down global trade. If two big economies go head-to-head with tariffs, it affects the whole world:
Export-heavy companies lose revenue
Manufacturing slows down
Job losses increase
Consumer confidence drops
All of this leads to selling pressure in stock and crypto markets.
3. Fear of Retaliation
When one country imposes tariffs, others often respond with retaliatory tariffs. This back-and-forth escalation causes fear, volatility, and mass selling.
If there’s recent tariff news (e.g., U.S. raising tariffs on China or vice versa), that could definitely be one of the reasons markets are crashing.
