Trump Reignites Mutual Tariffs: A Risky Trade Gamble

Donald Trump has just thrown a stone into the pond of international trade by announcing increases in tariffs, transforming a latent economic war into a real battlefield. The targeted countries, far from turning the other cheek, are preparing their retaliation. Meanwhile, the financial markets are on a roller coaster, and Bitcoin, always quick to react to macroeconomic shocks, is taking the full brunt of this impending storm.

Trump and Reciprocal Tariffs: An Explosive Cocktail for the Global Economy

With his new “reciprocal tariffs” policy, Trump, invested on January 20, wants to rebalance U.S. foreign trade with customs taxes. His message on Truth Social, triumphalist to the core, leaves no doubt: 

“Today is the big meeting: reciprocal tariffs!”. 

The problem is that China, Mexico, and South Korea, among others, do not intend to sit idly by. They are preparing countermeasures that could well escalate trade tensions and amplify the effects on the global economy.

These tariffs are likely to result in a sudden spike in prices for American consumers, which would further increase inflation, already in a bad state. The CPI (Consumer Price Index) has already shown a rise of 0.1% above forecasts, and some analysts anticipate a 0.3% increase in the PPI (Producer Price Index), a sign that companies are already factoring these new taxes into their costs. 

In short, Trump’s gamble could have more disastrous consequences than expected.

Bitcoin in the Storm of Trade Tensions

The crypto market did not take long to react to these announcements. As often, Bitcoin serves as an economic barometer: Trump’s decision led to a drop below $95,000. But while the short-term reaction is bearish, some experts see further ahead.

Analyst Jeff Park does not mince words: “The Plaza Accord 2.0 is coming”. He recalls that in the 1980s, a multilateral agreement weakened the U.S. dollar to boost exports.

Today, Trump could be looking to replicate this pattern to devalue the greenback and restore U.S. competitiveness.

If this hypothesis materializes, the consequence would be simple: faced with a devalued currency and rampant inflation, investors would seek refuge in alternative assets, notably bitcoin.

And paradoxically, what drives it down today could be the engine of a long-term surge.

How These Tariffs Impact the Economy and Financial Markets

The repercussions of Trump’s decisions are not limited to crypto. All financial markets tremble in the face of uncertainty, and several key points are to be monitored:

• Increase in inflation: with higher production costs, companies will pass on price increases to consumers,
• Decrease in purchasing power: heightened inflation could curb consumption and slow economic growth,
• Market volatility: stocks, bonds, and even commodities are likely to experience significant fluctuations,
• Geopolitical tensions: China and other U.S. trading partners may retaliate with similar taxes;
• Weakening of the dollar: if Trump’s strategy is indeed to devalue the U.S. currency, this could have major consequences for global trade.

In short, these tariffs could turn American economic policy into a real powder keg.

In summary, the trade war launched by Donald Trump plunges the economy into total uncertainty. The markets are reacting immediately with brutal shocks, and Bitcoin, which seemed to hold firm, has ended up falling under the weight of inflation and macroeconomic tensions. It remains to be seen whether, in the long term, this storm will turn out to be a boon for the followers of the cryptosphere.