Trump’s Tariffs Hit Global Markets and Crypto Amid Investor Caution

On April 2, 2025, President Donald Trump announced a broad new tariff policy affecting more than 20 countries. 

The decision sent shockwaves through financial markets, reigniting inflation concerns and pushing investors toward safer assets. Although cryptocurrencies were not directly mentioned in the policy, the broader market reaction has left assets like Bitcoin under pressure.

What the New Tariff Policy Includes

The latest tariff package includes import taxes ranging from 10% to 49% and applies to both manufacturing goods and essential products. Cambodia, Vietnam, and Sri Lanka face the steepest rates, with tariffs of 49%, 46%, and 44% respectively. 

Major trading partners such as China (34%), Japan (24%), and the United Kingdom (10%) are also included in the list.

^{Source: Twitter (X)}

According to JPMorgan, this represents the most significant US tax increase since 1968. It reflects a clear policy shift away from multilateral trade agreements and toward more aggressive protectionism. 

While the tariffs aim to boost domestic production and address perceived trade imbalances, they come at a time when global supply chains are still fragile.

The Biden-era tariff structure has now been replaced with one that not only penalises foreign producers but also raises the cost of imports for American businesses and consumers. 

Auto parts, electronics, and consumer goods are among the categories most affected, with the automotive industry expected to see price increases of $3,000 to $6,000 per vehicle. 

Economists warn that these changes could lead to slower growth and reduced consumer spending in the second half of 2025.

Read more: Trump's April 2025 Tariff Moves

How Markets Reacted to the Announcement

The reaction from global markets was swift. Equity indices in the US, Europe, and Asia saw declines as traders responded to the news. The S&P 500 dipped by more than 2% in early trading following the announcement, while the Nasdaq saw an even steeper drop. 

Bond markets reacted with a flight to safety, pushing yields on US Treasuries lower. The 10-year yield fell below 3.8%, signalling a broad risk-off sentiment.

The move also reignited fears of inflation, which had previously shown signs of cooling. Tariffs on essential imports tend to raise production costs for US businesses, and those costs are typically passed on to consumers. 

This comes at a delicate time for the Federal Reserve, which has paused its rate hikes but may now face renewed pressure to adjust its monetary stance if inflation rebounds.

The currency market also reflected increased volatility. The US dollar gained ground against several major currencies as capital moved into perceived safer assets. 

However, some emerging market currencies, especially from the countries affected by the new tariffs, saw sharp devaluations.

Commodity prices have started to shift as well. With supply chain uncertainty rising, the prices of industrial metals like aluminium and copper began to rise. Energy prices remained mixed as demand expectations were weighed against global economic uncertainty.

Crypto Remains on the Sidelines for Now

Although Bitcoin and other cryptocurrencies were not directly mentioned in the tariff package, they are not immune to the effects of broader economic policy. 

The cautious mood in financial markets has extended to the crypto sector, where investors are showing less interest in speculative assets.

Bitcoin, which reached a peak of $100,000 in March 2025, has since fallen back and remains below that high. Following the tariff announcement, BTC showed limited movement but failed to gain traction. 

This suggests a broader shift in investor priorities. With capital flowing into government bonds and other low-risk instruments, crypto is being treated with more caution in the current environment.

The connection between tariffs and crypto may not seem obvious, but it is linked through inflation and investor sentiment. 

If the new tariffs lead to sustained inflationary pressure, the Federal Reserve may be forced to maintain higher interest rates. In such a case, yield-bearing assets become more attractive, and non-yielding assets like Bitcoin tend to underperform.

However, the long-term narrative for crypto remains intact. As the global economic environment becomes more regulated and centralised, decentralised financial systems continue to attract interest. 

Tools like Bitcoin, Ethereum, and decentralised finance protocols offer alternatives to traditional systems, especially in scenarios where governments take more control of trade, money, and economic policy.

There is also a case to be made for Bitcoin as a hedge against inflation, although this argument has lost traction in recent months. 

Whether or not that narrative returns depends on how inflation trends develop in the coming quarters and whether fiscal policies in the US and abroad provide additional support for speculative markets.

Read more: Trump's Controversial Strategic Crypto Reserve

Conclusion

President Trump’s April 2025 tariff decision marks a major shift in US trade and economic policy. With more than 20 countries facing new import taxes, global markets have reacted with volatility, lower yields, and a broader pullback from risk. For the crypto sector, the impact is less direct but still important.

Bitcoin and other digital assets are navigating a market where caution dominates. As investors prioritise safety and capital preservation, speculative sectors like crypto are seeing lower inflows. 

That said, the broader appeal of decentralised systems may continue to grow in parallel, especially as economic control tightens across major economies.

Unless there is a reversal in inflation data or a return of fiscal stimulus, crypto assets may remain in a subdued phase. But for those watching macro signals closely, the next move could come just as quickly as the recent retreat.

Frequently Asked Questions

How high are Trump’s new tariffs in 2025?
Tariffs range from 10% to 49%, with countries like Cambodia, Vietnam, and Sri Lanka facing the highest rates.

How has the market reacted to the tariffs?
Global markets fell, bond yields dropped, and investor sentiment turned cautious. Stocks, crypto, and risk assets have all seen reduced activity.

Is Bitcoin directly affected by the tariffs?
Not directly, but the cautious investor mood and focus on inflation have made crypto less attractive in the short term.

Investor Caution 

While the crypto hype has been exciting, remember that the crypto space can be volatile. Always conduct your research, assess your risk tolerance, and consider the long-term potential of any investment.

Bitrue Official Website:

Website: https://www.bitrue.com/

Sign Up: https://www.bitrue.com/user/register

Disclaimer: The views expressed belong exclusively to the author and do not reflect the views of this platform. This platform and its affiliates disclaim any responsibility for the accuracy or suitability of the information provided. It is for informational purposes only and not intended as financial or investment advice.