Markets Surge as Trump Pauses Tariffs, Except for China

In a stunning reversal, President Donald Trump announced a 90-day pause on sweeping tariffs for over 75 nations, igniting a global stock market rally and sending a mixed message to America’s trade partners. The move comes after a tumultuous week of market losses and mounting international pressure over his aggressive trade policies.

The tariff pause excludes China, which remains the focus of Trump’s escalating trade war. Effective immediately, levies on Chinese imports have jumped from 104% to a staggering 125%, following Beijing’s retaliatory move to impose 84% duties on U.S. goods.

“This is a great time to buy!” Trump wrote in a Truth Social post shortly before markets surged, adding that “China will realize that ripping off the U.S.A. is no longer acceptable.”

Stocks responded dramatically to the news. The Dow Jones Industrial Average surged nearly 3,000 points, or 7.87%, its biggest jump in five years. The S&P 500 had its best day since 2008, gaining 9.5%, while the tech-heavy Nasdaq soared 12.2%, marking its second-best day on record.

Trump’s Tariff War: Effect on Crypto Market

However, just a week earlier, the crypto market has been rocked by a new wave of volatility following a major geopolitical development. Donald Trump, the 47th President of the United States, announced a sharp increase in tariffs on imports from the EU, Canada, China, and Mexico, sending shockwaves through global markets. 

In March, Trump announced a sweeping 25% tariff on all foreign-made cars in a bid to support the domestic bus industry. This came shortly before his earlier plan for "reciprocal tariffs" was set to kick in on April 2, targeting 15 countries including China, Canada, and Mexico. Economists were quick to warn that such measures could slash economic growth by 2% and drive up inflation.

Crypto markets reacted swiftly and harshly. Bitcoin, which had surged past $100,000 earlier in the year, slid to $80,000 by the end of March. The overall crypto market cap mirrored this drop, repeating a similar plunge seen in February when initial rumors of tariffs began circulating. Shares of major crypto-related companies also took a hit: MicroStrategy ($MSTR) fell 7%, while Coinbase ($COIN) dropped 6%.

The crypto world has been caught in the crossfire of these high-stakes economic policies, with traders navigating a landscape of constant uncertainty and wild price swings.

Huge Volatility for Crypto Market in Q1 & Q2 of 2025

The first half of 2025 has been a rollercoaster for the crypto market, primarily driven by unpredictable economic moves from the U.S. administration. Experts have even compared Donald Trump’s economic tactics to a Martingale betting strategy: doubling down with each escalation in hopes of an eventual win.

Bitcoin, which started the year at $109,000, has since dropped 25.3% to $82,000, briefly plunging to as low as $77,000. The turbulence has spared no one, with both long and short positions suffering heavy losses. On April 7 alone, over $1.5 billion in leveraged crypto trades were liquidated, followed by another $463 million after the latest bounce. For traders, the past month has been marked by high uncertainty, though some experts are beginning to point to possible long-term benefits of Trump’s economic strategy.

The Strategic Shift

Treasury Secretary Scott Bessent framed the announcement as a calculated strategy, not a retreat. “The message to our partners is clear: if you don’t retaliate, you will be rewarded,” he said. Bessent, along with Commerce Secretary Howard Lutnick, was reportedly at Mar-a-Lago helping draft the plan hours before its rollout.

The White House emphasized that the tariff pause was aimed at encouraging diplomacy and giving nations a chance to come to the negotiating table. Countries like Vietnam, the EU, and ASEAN quickly responded with overtures of dialogue and cooperation.

Mexico and Canada, meanwhile, will continue to face 25% tariffs unless they comply with the US-Mexico-Canada Agreement. Sector-specific tariffs, including those on steel, aluminum, and automobiles remain intact.

Europe and China: Diverging Paths

The European Union welcomed Trump’s pause and announced it would suspend its planned retaliatory tariffs, calling it a “chance for negotiation.” EU Commission President Ursula von der Leyen stated, “We want to give diplomacy a real opportunity.”

In contrast, China doubled down, calling the U.S. a “21st-century barbarian,” its Foreign Ministry accused Washington of using tariffs to “strangle the world.” China’s trade officials pledged to “fight to the end,” signaling a deepening standoff between the world’s two largest economies.

The Ministry of Commerce in Beijing also announced immediate talks with the EU over auto and EV pricing, seeking to reroute trade amid the shifting U.S. landscape.

Business and Economic Fallout

While the announcement sparked investor optimism, many in the business community remain wary. Small business owners, particularly those reliant on Chinese imports, warned of skyrocketing costs.

Economists remain divided on the broader implications. RSM’s Joe Brusuelas cautioned that the pause “only temporarily postpones a likely recession,” while Goldman Sachs adjusted its forecast from a high likelihood of recession to a 45% chance over the next year.

What Comes Next?

Source: Steve Burns (post on X)

The current climate offers little reassurance. Bitcoin has already dropped nearly 25% this year: from almost $110,000 in January to around $82,000, highlighting just how sensitive the crypto market remains to macroeconomic pressures.

Cryptocurrencies are still heavily dependent on global economic stability, as a significant wave of asset withdrawals between late 2024 and early 2025, especially among addresses transacting 100 to 10,000 BTC is a clear signal that large institutional players or whales are retreating. As a result, Bitcoin’s liquidity is taking a hit, dimming hopes for a rapid recovery.

In short, while some believe this storm could pave the way for a more decentralized financial future, the road ahead for crypto is anything but certain.

Trump’s team has hinted at ongoing talks with countries like Vietnam, and administration officials say the president will be personally involved in every negotiation. However, the future remains uncertain.

“This was baked into the strategy all along,” Bessent claimed while acknowledging that “complex negotiations” lie ahead. Yet even top officials like U.S. Trade Representative Jamieson Greer admitted they were unaware of the pause until after it was publicly announced.

For now, investors are enjoying the rebound, but the clock is ticking. After 90 days, the world will be watching to see whether this pause leads to permanent deals or a renewed escalation in Trump's high-stakes trade war.

The outlook for crypto in the wake of Trump’s aggressive tariff policies remains mixed. While the short-term picture looks good, some analysts also see the long-term potential shifts that could ultimately benefit Bitcoin.