On April 2, Trump announced the implementation of a "reciprocal tariff" policy, which exceeded market expectations. The policy combines "blanket" tariffs with "one country, one tax rate" and involves more than 60 major economies in the world. After the announcement, the Nasdaq futures index fell sharply by more than 4%, Bitcoin fell back to $82,000, Ethereum fell below $1,800 again, while gold rose against the trend and hit a record high.
Analysts at StarEx Exchange believe that "reciprocal tariffs" may increase market uncertainty and further increase the risk of "stagflation" facing the US economy, thereby significantly increasing the possibility of a US recession. In the long run, this policy may be good for gold and Bitcoin. Faced with the risk of "stagflation", the Federal Reserve may maintain a wait-and-see attitude in the short term, making it more difficult to cut interest rates. This may further drag down economic growth and intensify market adjustment pressure.
According to White House policy, the United States plans to impose a 10% basic tariff on all imported goods, which is consistent with the "blanket" tariff promised by Trump during the campaign. Industries that have previously implemented a 25% tariff (such as steel, aluminum, and automobiles) are not affected by the new policy. In addition, the United States has set higher reciprocal tariffs for different economies, including the European Union (20%), Japan (24%), South Korea (25%), China (34%), Taiwan (32%), India (26%), Thailand (36%), etc.
Analysts at StarEx Exchange believe that "reciprocal tariffs" not only fail to ease market uncertainty, but may also cause wider concerns. First, the policy has a wide coverage and high tax rates, which will have a significant impact on both the US and global economies. Second, there is uncertainty about the response measures of various countries: will they choose to tolerate or take retaliatory actions? If the tariff war escalates, it may further weaken global economic growth. In addition, Mexico and Canada are not included in the scope of the new policy, and whether they will be subject to additional tariffs in the future remains uncertain. In addition, how long will the "reciprocal tariffs" last? Is there a possibility of lowering the tax rate through negotiations in the future? Trump's long-term goal is to promote the return of manufacturing through tariffs and use tariff revenue to make up for the fiscal deficit. If he insists on implementing this strategy, the tariff policy may become long-term.
If the tariff policy continues, the US economy will face a more serious risk of "stagflation", and a downward economic growth trend is almost inevitable. After the tariffs are imposed, companies face the dilemma of raising commodity prices or cutting profits. If prices are raised, consumer costs will rise, demand will be suppressed, and economic growth pressure will increase. If prices are not raised, corporate profit margins will be squeezed, investment and employment demand will weaken, and the economy will also face the risk of slowing down. In addition, tariffs are essentially equivalent to the government increasing taxes, and the final cost is borne by companies and consumers. The effect is similar to fiscal tightening, and investment and consumer spending will be suppressed.
In the short term, the tariff policy will push up the price level and bring upward pressure on inflation. Faced with the dilemma of "stagflation", the Federal Reserve may be forced to adjust its policy focus and be more inclined to control inflation. StarEx analysts predict that the Federal Reserve will need at least two months to evaluate the actual impact of the tariff policy on inflation. Unless the US economy deteriorates seriously, the Federal Reserve may not make a decision to cut interest rates in the first half of the year, which will increase downward pressure on the market.
The global economic slowdown and the "stagflation" environment are conducive to the rise of gold prices, so gold rebounded first. Bitcoin is still mainly regarded as a risky asset, and the consensus in the traditional financial system is not yet solid, so it may still fluctuate with the trend of US stocks in the short term. However, as market liquidity improves, Bitcoin is expected to usher in a new round of bull market, and may break through the $200,000 mark in the future.
