The announcement of a 90-day pause on tariffs, with the exception of those on China, has created a complex situation with potential implications for the global economy. Here's a breakdown of the key factors to consider:
* **Market Reaction:**
* The immediate reaction to the pause was a significant surge in global stock markets, indicating a relief rally. This suggests that investors were concerned about the potential negative impacts of widespread tariffs.
* This initial surge could be attributed to the reduction of immediate uncertainty, allowing markets to breathe.
* **Economic Implications:**
* The exclusion of China from the tariff pause maintains significant trade tensions between the U.S. and China. This means that the potential for ongoing trade disputes and their associated economic disruptions remains.
* The 90-day pause provides a window for negotiations and potential trade agreements with other countries. Whether this leads to a sustained recovery or just a temporary respite remains to be seen.
* The fact that the pause was enacted after market turbulance, indicates that market forces have a strong influence on the tariff policies.
* **Long-Term Outlook:**
* Whether this pause marks the beginning of a genuine recovery depends on several factors, including the outcomes of trade negotiations, the overall health of the global economy, and the future direction of U.S. trade policy.
* The continued tariffs on China create an ongoing risk of trade war escalation, which could negatively impact global economic growth.
* It is important to understand that the global markets are very sensitive to any changes in the tariff situation, and that any future changes could cause large market swings.
In summary, while the tariff pause has provided a short-term boost to markets, the long-term outlook remains uncertain due to the ongoing trade tensions with China. It is difficult to say if this is the begining of recovery, or a short term relief rally.
But, to my mind, this pause will help to increase the crypto prices and regain or compensate the losses, attract more investors and shareholders.