Former President Donald Trump is shaking up the flow of international trade. He has announced an increase in tariffs, turning a potential economic war into a reality. In response, major trading partners such as China, Mexico, and South Korea are not remaining idle and are preparing retaliatory measures. In this context, financial markets are experiencing rapid fluctuations, and Bitcoin, which is sensitive to economic instability, is receiving a significant blow.
Trump’s ‘Reciprocal Tariffs’ Policy Shakes the Global Economy
Since his inauguration on January 20, 2025, Trump has introduced a new 'Reciprocal Tariffs' policy, demonstrating his intention to correct the trade imbalance faced by the United States. He conveyed a strong message on his social media platform, Truth Social:
“Today is the day: Reciprocal Tariffs!”
The concern lies in the reactions from other countries. Major trading partners such as China, Mexico, and South Korea are preparing countermeasures, including retaliatory tariffs. Such movements heighten trade tensions and could significantly impact the global economy.
These tariffs are expected to have a negative effect on American consumers. The prices of imported goods could soar, leading to accelerated inflation. Currently, the Consumer Price Index (CPI) has risen 0.1% more than expected, and some analysts predict that the Producer Price Index (PPI) could increase by 0.3%. This indicates that companies are already reflecting the new tariffs in their costs.
As a result, Trump’s ‘tariff gamble’ may lead to more serious economic repercussions than anticipated.
Bitcoin Caught in the Whirlwind of Trade Tension
The cryptocurrency market reacted immediately to Trump’s announcement. Bitcoin, a key asset sensitive to macroeconomic volatility, dropped below $95,000 following the announcement. However, some experts anticipate new opportunities from a long-term perspective.
Cryptocurrency analyst Jeff Park analyzes the situation as follows:
“Plaza Accord 2.0 is on the horizon.”
In the 1980s, the U.S. artificially devalued the dollar through the Plaza Accord to enhance export competitiveness. There are analyses suggesting that Trump is attempting to implement a similar strategy to devalue the U.S. dollar.
If this hypothesis comes to fruition, the implications are clear. Amid a devalued dollar and soaring inflation, investors are likely to seek alternative assets, with Bitcoin potentially becoming the leading option. Therefore, factors that may have caused short-term declines could ultimately serve as catalysts for Bitcoin's long-term growth.
Economic and Financial Market Impacts
The shocks from Trump’s tariff policies do not only affect the cryptocurrency market. The entire financial market is fluctuating amid uncertainty, and there are significant economic impacts expected:
- Inflation Rise: Companies are likely to pass rising production costs onto consumers, leading to higher prices.
- Reduced Purchasing Power: With rising inflation, consumer activity is likely to contract, slowing economic growth.
- Increased Market Volatility: Stock, bond, and commodity markets are expected to experience significant volatility.
- Heightened Geopolitical Tensions: If major trading countries, including China, impose retaliatory tariffs, it could lead to major disruptions in international trade dynamics.
- Potential Dollar Depreciation: If Trump intentionally lowers the value of the dollar, unexpected shocks could occur across global trade and the broader economy.
In this way, Trump’s new tariff policy could act as an “economic powder keg,” driving the U.S. economy into a state of instability.
Conclusion
The trade war triggered by Donald Trump is plunging the global economy into complete uncertainty. The financial markets are displaying immediate volatility, with even Bitcoin, which had been resilient, unable to withstand the pressures of inflation and macroeconomic instability, leading to a decline. However, there remains a possibility that this economic volatility may provide new opportunities within the cryptocurrency market in the long run.
It is a critical moment to observe how things will unfold. How will the global economy and Bitcoin respond to this monumental change?
