Trump Declares National Emergency, Imposes Tariffs: Global Markets in Turmoil, Crypto Plunges

Trump Declares National Emergency, Imposes Tariffs: Global Markets in Turmoil, Crypto PlungesOn April 2nd, US President Trump declared a national emergency and imposed a 10% "baseline tariff" on all countries, with higher, personalized "reciprocal tariffs" levied on nations with the largest trade deficits. This move sent global markets into a tailspin, severely impacting the cryptocurrency market as investors dumped risky assets and sought safe havens

Trump Declares National Emergency, Imposes Tariffs: Global Markets in Turmoil, Crypto Plunges

On April 2nd, US President Trump declared a national emergency and imposed a 10% "baseline tariff" on all countries, with higher, personalized "reciprocal tariffs" levied on nations with the largest trade deficits. This move sent global markets into a tailspin, severely impacting the cryptocurrency market as investors dumped risky assets and sought safe havens.

Tariff Policy Sparks Market Panic

The White House stated the administration's actions aim to enhance US competitiveness, protect US sovereignty, and strengthen national and economic security. The baseline tariff took effect at 00:01 EST on April 5th, while the "reciprocal tariffs" on countries with the largest trade deficits came into effect at 00:01 EST on April 9th. The statement also emphasized Trump's authority to adjust tariff levels as needed.

This abrupt tariff policy caught global markets off guard. Investors, fearing exacerbated trade tensions and negative impacts on global economic growth, sold off risk assets and sought safer investments.

Cryptocurrency Market Takes a Hit

The cryptocurrency market was particularly hard hit by the market panic. Bitcoin's price plummeted over $4,000 following the announcement, falling from $86,900 to $82,100; Ethereum dropped from $1950 to $1790. Other cryptocurrencies like XRP, Solana, and Cardano also experienced significant declines.

Coinmarketcap data showed a net outflow of $8.6 billion from cryptocurrency ETFs on Wednesday, with Bitcoin ETFs seeing a net outflow of $8.7 billion. While the losses narrowed at the time of publication, Bitcoin was still down over 1% in 24 hours, trading near $83,000; Ethereum fell 1.99%; and Dogecoin dropped 1.79%. Coinglass data revealed $500 million (approximately RMB 3.65 billion) in liquidated cryptocurrency contracts over the past 24 hours, affecting over 163,000 users.

Over the past seven trading days, Bitcoin fell nearly 5%, Ethereum over 10%, and Cardano over 12%. Solana and XRP both declined by over 13%, while Dogecoin plunged over 16%. This widespread decline clearly reflects investors' significant concerns about trade tensions and the broader economic impact of the tariffs.

Safe-Haven Assets Rise

Amidst the trade tensions, investors flocked to safe-haven assets. Spot gold prices surged to new highs, indicating market anxieties about the future economic outlook.

Economists Fear Inflation and Recession

Economists widely fear Trump's tariff policy will fuel US inflation and damage consumer confidence. JPMorgan Chase's chief global economist, Bruce Kasman, expressed significant concerns about the US economy earlier in March, forecasting a 40% probability of a recession this year, significantly higher than the 30% predicted at the beginning of the year.

The Yale University Budget Lab's predictive model indicates that, following the implementation of "reciprocal tariffs," US personal consumption expenditure prices would rise 1.7% in the short term if other countries didn't retaliate, with a 0.6 percentage point decrease in real GDP growth in 2025. If other countries retaliate, the increase in US personal consumption expenditure prices would expand to 2.1%, and real GDP growth would decline by 1 percentage point.

International Condemnation

The EU and several US trading partners have announced retaliatory tariffs and other countermeasures in response to the US tariff policy. A French government spokesperson condemned Trump's actions as exhibiting an "imperialist posture" and a belief in being "master of the world," stating France is prepared to "fight this trade war" with responses planned for mid- and late April.

European Commission President Ursula von der Leyen called Trump's new tariff policy a "major blow to the world economy" and stated the EU is preparing further "countermeasures" should negotiations fail. She noted the US actions would increase inflation, negatively impacting all sectors from day one, increasing the cost of doing business with the US, creating chaos, and resulting in dire consequences for millions worldwide. She also expressed the disappointment of many Europeans with their "old ally," the US, but emphasized Europe's unity in facing this challenge.

Disclaimer: This information and data are for reference only and do not constitute investment advice. Please verify information before use. Use at your own risk.