Broader implications include heightened global trade volatility, with potential crypto market effects expected as traders seek stability.
The newly imposed tariffs under Executive Order 14257 reach levels described by President Trump as never before seen, impacting a broad range of imports. This action comes as a response to ongoing trade imbalances. Trump’s administration spearheaded these measures as part of a strategy to rectify trade imbalances, following recent executive directives. The current tariffs could climb up to 10% on U.S.-origin goods, with up to 50% on others.
These tariffs primarily affect significant trading partners, including the European Union and China, potentially inciting further economic response. Global market effects are anticipated, given historical precedents where similar measures caused economic volatility. While the executive order does not directly reference cryptocurrencies, past tariffs have correlated with increased crypto market fluctuations. Cryptocurrencies reacted to historical trade tensions, indicating a potential rise in volatility. The 2018–2019 tariffs led to increased stablecoin inflows as markets adapted.
Effects could extend into the financial sector, involving risk aversion among traders and increased demand for stable financial instruments. The decision may prompt retaliatory measures, further amplifying economic uncertainty. Historical data suggests the current tariffs could drive a more conservative investment strategy across digital assets.
Global markets could see shifts, driven by varied responses to these tariffs. Data from past events shows a tendency for increased stablecoin usage as a hedge. The pending tariff increases may push investors towards stability-favoring cryptos like USDT or impact cryptocurrencies tied to global trade dynamics.
“In Executive Order 14257 of April 2, 2025 (Regulating Imports With a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits), I declared a national emergency … and imposed additional ad valorem duties that I deemed necessary and appropriate to deal with that unusual and extraordinary threat …” — Donald J. Trump, President of the United States White House Executive Order
