The series of tariff policies implemented after Trump took office undoubtedly intensified global economic tensions, causing the U.S. stock market to evaporate trillions of dollars within a week, with even Wall Street elites expressing their frustrations. Of course, the crypto market, which has a certain correlation to U.S. stocks, did not escape unscathed.

This article will help readers understand Trump's tariff policies in depth and analyze what he really intends to do.

1. Timeline development:

1⃣ On January 31: Announced a 25% tariff on goods from Mexico and Canada, and a 10% tariff on Chinese goods.

2⃣ On February 4: A 25% tariff on goods from Mexico and Canada and a 10% tariff on Chinese goods took effect.

3⃣ On March 4: Tariffs on Chinese goods rose to 20%. On March 12, a 25% tariff on all steel and aluminum products was imposed.

4⃣ On April 2: A 10% baseline tariff was imposed on all imported goods, with tariffs of 11%-50% imposed on 57 countries, resulting in a total tax rate of 54% for China. The 10% baseline tariff became effective on April 5.

5⃣ On April 9: A 50% tariff on Chinese goods was added, bringing the total tax rate to 104%; a 25% tariff was imposed on non-USMCA-compliant Canadian automobiles.

6⃣ On April 10: Tariffs on China increased to 125%, while other countries suspended tariffs for 90 days and implemented a 10% reciprocal tariff.

Notably, a 125% tariff has been imposed on China. After the United States implemented its tariff policy, some countries also fought back.

China:

On February 10, tariffs of 15% and 10% were imposed on U.S. coal, liquefied natural gas, oil, and agricultural machinery.

On March 10, tariffs of 10%-15% were imposed on meat and agricultural products, timber imports were suspended, and soybean import licenses were revoked.

Starting April 10, a 34% tariff will be imposed on all U.S. goods, with some items reaching as high as 84%, in response to Trump's tariff policy.

Canada:

On March 4, a 25% tariff was imposed on U.S. goods valued at $2.08 billion (CA$3 billion), planned to expand to $8.6 billion (CA$12.5 billion) but was later suspended.

On March 13, a 25% tariff was imposed on steel and aluminum products valued at $2.06 billion (CA$2.98 billion).

Starting April 3, a 25% tariff was imposed on U.S. manufactured automobiles that do not comply with USMCA.

The EU plans to implement retaliatory tariffs in mid-April and later, involving €4.5 billion in consumer goods and €1.8 billion in steel and agricultural products.

The UK stated it has 'multiple means' to protect its interests, without specifying, facing a 10% baseline tariff.

Norway is responding to a 15% tariff through negotiations, calling it 'bad news' that affects companies and jobs.

South Korea is taking emergency support measures and negotiating to reduce the impact. Australia is not considering retaliatory tariffs, calling the U.S. decision 'not a friendly act.'

Malaysia is not considering retaliatory tariffs and is engaging in dialogue with the U.S., facing a 10% baseline tariff.

South Africa is seeking a new 'bilateral reciprocal trade agreement' in response to a 30% tariff.

We can see that the countermeasures taken by various countries include retaliatory tariffs, negotiations, and seeking alternatives. Among them, China's response is the most resolute, the EU and Canada took collective action, while Australia and Malaysia leaned towards avoiding direct confrontation.

On April 5, after the baseline tariff went into effect, the Nasdaq closed more than 20% below its record closing high, while the S&P 500, Nasdaq Composite, and Dow Jones indices recorded their largest two-day declines since March 2020.

On April 7, during the time frame humorously referred to as 'Black Monday,' global stock markets plummeted. Thousands of stocks in the domestic market hit their daily limit down, and Nasdaq futures fell directly by 4%.

In the last two days, the U.S. stock market has dropped 10%, with a market value evaporating by $6 trillion. Oil prices plummeted by 14%, silver prices dropped 16%, copper prices fell by 13%, while gold prices also crashed by 5%, and BTC once plummeted by 7%, dragging down the entire crypto sector.

All types of assets are falling, with only the fear index rising, reaching the highest value since February 2020.

So what is the real purpose behind Trump's increase in tariffs, even at the cost of severely impacting the U.S. stock market and causing the wealth of his aide Elon Musk to shrink by over $100 billion?

2. Manufacturing returning to the homeland? NO!

It is well known that increasing tariffs raises the cost of foreign goods, making U.S.-produced goods more competitive in price, which may encourage companies to relocate production back to the U.S. to avoid tariff costs, especially in industries with high transportation costs and supply chain disruption risks.

Additionally, increasing tariffs can protect domestic industries from the impact of cheap imported products, thereby creating more manufacturing job opportunities.

During his previous presidential campaign, Trump explicitly promised to attract manufacturing back to the U.S. by increasing tariffs, emphasizing the protection of American workers and the restoration of industrial dominance. The policies mentioned during the campaign included high tariffs on steel, aluminum, and other goods, reducing trade deficits, and supporting domestic production.

But did increasing tariffs really bring manufacturing back to the U.S.? The answer is no.

The increase in tariffs will lead to rising consumer prices, supply chain disruptions, and may trigger a global trade war. For instance, the increase in tariffs during Trump's presidency in 2018 resulted in an additional $51 billion in costs per year, primarily borne by U.S. companies and consumers.

It is evident that tariffs do not necessarily lead to a return of manufacturing; they may even increase costs for the U.S. and worsen relations with other countries.

If Trump's true goal is to bring manufacturing back, then the protective tariff policies proposed by some other presidents in history may have succeeded long ago.

Historically, presidents such as Lincoln, McKinley, and Hoover supported protective tariffs. Lincoln stated in 1847, 'Give us a protective tariff, and we will have the greatest nation on Earth,' and implemented a 44% tariff during the Civil War to support industry. McKinley promised high tariffs during his 1896 campaign to bring prosperity, with the Dingley Tariff of 1897 raising rates to 50%.

Hoover proposed increasing tariffs to keep foreign goods out, raising tariffs to 60%. However, Hoover's trade war measures not only failed to revive domestic industry but also severely impacted the U.S. and global economies. Four years later, global trade volume shrank by 66%, U.S. imports dropped from $4.4 billion to $1.5 billion, exports fell from $5.4 billion to $2.1 billion, and GDP decreased from $103.1 billion to $55.6 billion. Hoover is therefore regarded as one of the worst presidents in U.S. history.

Therefore, Trump's goal in increasing tariffs is not to bring manufacturing back to the U.S.

3. Alleviating debt, dollar protection? YES!

The current U.S. government faces severe fiscal challenges, with high levels of debt and deficit.

As of April 10, 2025, the U.S. national debt stands at over $36 trillion, with $29 trillion held by the public.

The budget deficit for the fiscal year 2025 is projected to be $1.9 trillion, with the GDP ratio continuing to rise, potentially reaching 118% by 2035.

In February 2025, the monthly deficit was $307 billion, an increase of $11 billion compared to the same period last year, with a cumulative deficit reaching $1.1 trillion.

These data all indicate that the U.S. government is in dire need of money and must seek new sources of revenue while reducing expenditures.

Moreover, Elon Musk's previously established D.O.G.E department, which aimed to reduce spending and lay off U.S. government employees, found after several months that it only saved $100 billion, a drop in the bucket compared to the current debt.

That can only mean finding another way - increasing tariffs.

According to data from CNBC and the Peterson Foundation, the new tariffs implemented in 2025 are expected to significantly increase government revenue. For example, a 20% general tariff could bring in $250 billion annually, while a 10% tariff on China is expected to generate $20 billion in revenue for the remainder of 2025.

The Tax Foundation stated that the general tariffs implemented on April 2 (excluding Canada and Mexico) will increase revenue by $1.2 trillion over the next decade. The escalated tariffs from April 2 are expected to add $1 trillion over the next ten years. Overall, Trump's tariffs will increase revenue by $2.2 trillion over the next decade in a conventional way (with a dynamic estimate of $1.6 trillion).

It can be seen that tariff revenue can partially offset the budget deficit and alleviate the pressure of debt growth. At the same time, encouraging domestic production and reducing trade deficits may enhance the competitiveness of the U.S. economy and boost investor confidence, thereby supporting the dollar's value.

Moreover, the rates on U.S. Treasuries have always been a hot topic. Trump not only wants to increase revenue through tariffs but also aims to reduce the interest rates on national debt through tariffs.

Why is this so? It is well-known that U.S. Treasuries are a safe-haven financial asset, offering lower returns compared to risk assets like U.S. stocks and cryptocurrencies. When the market is booming, investors tend to prefer high-risk products such as U.S. stocks and cryptocurrencies. At that time, U.S. Treasuries can only attract investors by raising interest rates. When Treasury yields rise, old bonds must be sold at a discount to match the yields of new bonds. Ultimately, when bonds mature, the government continuously uses new money to pay off old debts, creating a vicious cycle.

When the tariff policy took effect, U.S. stocks, cryptocurrencies, and other high-risk assets plummeted, trapping many investors. At this point, U.S. Treasuries became the investors' first choice for safe-haven investments. When funds are ready to flow in, U.S. Treasuries do not need to attract users by raising interest rates; instead, they can lower their own rates. For every 1% decrease in interest rates, the federal government can save approximately $400 billion in interest payments each year. Thus, when bonds mature, the U.S. government reduces its debt expenditures.

Similarly, when funds are ready to flow into U.S. Treasuries, investors need to exchange their domestic currency for dollars, increasing demand for dollars and thereby pushing up the dollar's exchange rate, achieving dollar protection.

Although the decline in U.S. Treasury yields may narrow the interest rate differential between the U.S. and other countries, leading to a potential depreciation of the dollar, in a risk-averse environment, a surge in funds flowing into U.S. Treasuries usually still boosts the dollar's value.

The Trump administration also proposed the Mar-a-Lago agreement, attempting to convert U.S. Treasuries held by allies into 100-year zero-coupon bonds. Essentially, this was aimed at extending the debt maturity, locking in low interest rates, and reducing the current U.S. government's debt repayment pressure.

4. Is it a natural outcome? NO!

On April 8, the offshore RMB against the dollar exceeded 7.4. The data indeed protected the dollar and promoted its appreciation. However, the situation regarding U.S. Treasury yields is not optimistic.

On April 9, the yield on 10-year U.S. Treasuries reached a high of 4.48. The chart shows that from April 7 to April 9, the yield remained high until April 10, when it slightly declined.

This did not unfold according to the ideal script envisioned by the Trump administration, as rising interest rates will inevitably lead to increased spending later.

Why do U.S. Treasury yields rise? It is actually caused by sell-offs from other countries. Under Trump's extreme tariff policies, inflation in the U.S. is bound to rise. When inflation exceeds bond yields, real returns become negative, prompting countries to sell off to protect their capital. The sell-off of U.S. Treasuries by various countries will increase the supply of Treasuries in the market; if demand does not grow simultaneously, Treasury prices will fall, and yields will naturally rise - 'when PT falls, YT rises.'

Trump may not have anticipated that governments around the world would respond so strongly, directly confronting the tariff policies and retaliating with extremely high tariffs. Upon seeing U.S. Treasury yields remaining high, the Trump administration had no choice but to announce a 90-day suspension of tariffs on April 10, during which most countries' tariffs were reduced to 10%, encouraging some countries to reach more favorable trade agreements within 90 days.

After the pause in tariff postings, the S&P 500 index immediately rose more than 9%, marking its best single-day performance since the 2008 financial crisis. The stock prices in the aviation, technology, and automotive industries rose, with Tesla increasing more than 20%, and Ford and General Motors rising over 7%. Cryptocurrencies also surged significantly, with BTC rising over 6% to surpass $80,000, and ETH and SOL both increasing over 14%, with all altcoins rebounding by around 10%.

5. Is the market mainly volatile? YES!

Currently, global markets are suffering from the impact of Trump's policies, especially extreme tariff policies that not only strain international trade relations but may also push the global economy to the brink of a trade war, potentially leading to a global recession. The cryptocurrency market, as a high-risk investment area, is characterized by high volatility. Coupled with global economic uncertainties, crypto prices are bound to fluctuate significantly, and in the future, we may see substantial market volatility; everyone should protect their holdings of U!

In such a macro environment, risk management is more important than making money!