Trump Tariffs and its Impacts
Donald Trump’s tariffs, implemented during his presidency starting in 2025, have introduced significant uncertainty into global financial markets, including the cryptocurrency sector. These tariffs, targeting major U.S. trading partners like Canada, Mexico, and China with rates such as 25% on Canadian and Mexican goods and 10% on Chinese imports, have sparked a mix of short-term volatility and long-term speculation about their effects on crypto markets.In the short term, the tariffs have generally been a headwind for cryptocurrencies. When Trump first announced these measures, markets reacted with a sell-off, reflecting broader economic concerns about trade wars, inflation, and reduced growth. Bitcoin, for instance, dropped from a high of around 109,000 in early 2025 to below 80,000 by March, with other major cryptocurrencies like Ethereum and Dogecoin seeing even steeper declines. This aligns with a "risk-off" sentiment, where investors retreat from speculative assets like crypto during periods of economic instability. The tariffs increase the cost of imported goods, potentially driving inflation and prompting central banks like the Federal Reserve to maintain or raise interest rates—conditions that typically hurt high-risk, non-yielding assets like cryptocurrencies. Additionally, the crypto market’s growing correlation with traditional markets, such as the tech-heavy Nasdaq, has amplified these downward pressures as stocks also faltered.
