Tariff Increase Targeting China: Is the Trade War Rekindled?

Trump publicly declared that if China does not withdraw its 34% retaliatory tariffs, the U.S. will retaliate strongly by raising tariffs on Chinese goods to 50%. This is not just a simple negotiation tactic, but a clear message to the world: U.S.-China trade relations have entered a new phase of confrontation.

Meanwhile, Trump also announced the termination of all trade negotiations with China and will shift the trade focus to other countries. This posture of 'complete disconnection' has almost compressed diplomatic flexibility to zero, which is significant.

U.S. and China Reveal Their Hands: Who is Hurt More?

For the U.S., consumer goods prices are bound to rise, affecting everything from clothing and toys on supermarket shelves to tech products like smartphones and computers, leading to a surge in inflationary pressure.

For China, exports to the U.S. will be hampered, especially for manufacturing and export-oriented enterprises. However, compared to the past, China's dependence on the U.S. has been decreasing year by year, with domestic demand and other export markets becoming a buffer.

For the world, supply chains are torn apart, potentially giving rise to a new round of global economic slowdown or even recession.

Crypto Market: Safe Haven or Whirlwind?

Historical experience shows that during periods of geopolitical economic instability, cryptocurrencies are often regarded as one of the safe-haven assets. The uncertainty of the trade war may drive more investors toward digital assets like Bitcoin and Ethereum to evade traditional market risks.

However, at the same time, the drastic fluctuations in the market may increase the instability of the crypto market. The direction of policies is unpredictable, and regulatory rhetoric may escalate at any time. The crypto market could rise due to safe-haven demand or be affected by liquidity tightening.

How Should Investors Respond?

Closely monitor the developments: Details of tariffs and trends in trade negotiations are important signals affecting the market.

Diversify asset allocation: Seek a balance between traditional and crypto assets to avoid excessive concentration of risk.

Pay attention to changes in market sentiment: Fluctuations in traditional markets often signal a shift in crypto market sentiment.

Prepare for volatility: The market will enter a news-driven period, making flexible responses particularly crucial.