The tariff war, initiated by President Trump, escalated quickly. However, with a 90-day tariff pause, financial markets recovered swiftly. Still, we’re not out of the woods. China is not included in this pause. After Trump increased China’s tariffs, they’re up to 104%.
In turn, America now faxes a 118% tariff from China. A recent Binance report gives a good insight into how the tariffs impact the crypto sector. Here’s the recap of this recent Binance report on the tariff situation.
A Global Tariff War?
The tariffs were already announced during Trump’s presidential campaign. Nonetheless, the financial markets reacted in shock once they went into effect. According to the Binance report, a global trade war has ignited fear and uncertainty. Financial markets don’t like these factors, so they tend to tank.
The 2d April saw ‘Liberation Day’. This is the day when sweeping reciprocal tariffs hit the markets. Stocks dropped 10% in only three days. This marked one of the hardest drops for the stock market in recent history. The tariffs were both country-specific and sector-specific. Let’s take a look at these tariffs.
- Liberation Day saw a 10% blanket tariff on all imports. This went into effect on 5th April.
- There was a list of 180 countries, with tariffs differing per country. For example, China saw a 34% addition. There already was an existing 20%, so now it faced a 54% tariff. The European Union saw a 20% addition, Japan 24%, and Vietnam 46%, and auto imports faced 25%.
LIBERATION DAY RECIPROCAL TARIFFS
pic.twitter.com/ODckbUWKvO— The White House (@WhiteHouse) April 2, 2025
Countries showed mixed reactions. Some threatened with retaliatory measures, others wanted to sit down and talk and go back to 0 tariffs. However, the last couple of days are on a level you can’t make up.
Crazy Days
On 7th April, there was a rumor that Trump was considering a 90-day tariff pause. However, the White House described this as fake news. In the few hours between the two announcements, stock markets recovered by 8%. Not too surprisingly, they lost almost all of this after the denial by the White House.
Yesterday, President Trump mentioned that it is a great time to buy. Only four hours later, he announces a 90-day tariff pause. Which by the way, it is totally unclear what it exactly implies. Within minutes, financial markets start to recover.
BREAKING: President Trump’s financial advice: pic.twitter.com/nB0vhzwJZ9
— The Kobeissi Letter (@KobeissiLetter) April 9, 2025
So, China is now at 118% tariffs on American goods. Trump upped Chinese tariffs to 125% yesterday. This is World War III in trading. What will China’s next step be?
Nonetheless, the Nasdaq Composite had its 2nd best day ever by rising 12+%. It added $4 trillion in only 10 minutes. Bitcoin was also up by 10%. See the picture below for the stock market.
Source: X
Why Did Trump Start Tariffs?
Trump’s tariffs can have two potential reasons.
There’s $9.2 Trillion of US Debt
Trump wants lower interest rates, especially in the 10-year bond. With these lower rates, he wants to refinance this debt in the next 12 months. If these rates don’t come down, it may be catastrophic for the US. So, creating a trade war based on tariffs is such a way to weaken the Dollar and lower the interest. This will result in Powell turning on the money printer again.
Trump’s Real Estate
However, there’s more. Lowering the interest rates will be good for the US and for Trump’s presidency. But we also know that Trump will do anything to help himself. There’s also a personal reason why he wants lower interest rates. Jeff Park argued that Trump needs this lower interest rate for his real estate. He’s the head of Strategy for Bitwise.
BREAKING: Head of Strategy at @BitwiseInvest says TARIFFS ARE BULLISH FOR BITCOIN
You need to read this, if it’s the ONLY thing you do this week
https://t.co/vAnUP8l3GO pic.twitter.com/Blldu7NqYY
— Magnus (@BTCMiningNewz) February 2, 2025
The 10-year bonds are one of the baselines for commercial real estate lending rates. So, it’s also in his interest to lower these interest rates.
However, China has billions in Treasury bonds. So, when the US borrows money, it does so by selling Treasury bonds. Mostly to China, Japan, and Europe. Well, some of these holders are selling their bonds. China, to the tune of $50 billion. As a result, the yield on bonds increased. Could this be one of the reasons why Trump paused the tariffs?
China has recently sold $50 billion in U.S. Treasury bonds, contributing to an increase in bond yields. pic.twitter.com/RvEvesc5xA
— Karma 覚 (@iambhutia) April 9, 2025
This concludes the recap of the Binance Report Part 1, keep an eye out for Part 2.
Disclaimer
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