Market Volatility- Trump’s Tariff Pause: A Game-Changer for US Markets and Crypto
Market Volatility– U.S. President Donald Trump has announced a 90-day pause on “reciprocal tariffs,” reducing the tariff rate to 10% for countries that do not retaliate. However, Trump also stated that the tariff rate on China would rise to 125% due to the country’s counter-tariffs against the U.S.
In a post on Truth Social, Trump remarked, “At some point, hopefully, in the near future, China will realize that the days of ripping off the USA, and other Countries, is no longer sustainable or acceptable.” This announcement has led to significant market reactions.
Market Volatility Following Tariff Announcements
According to TradingView data, the S&P 500 index surged by nearly 7% following Trump’s announcement, highlighting the high volatility of capital markets. The volatility index (VIX) spiked above 60 on April 7, marking the highest level since the 2024 yen carry trade unwinding. While the market saw a $2 trillion boost in value in anticipation of the tariff pause, volatility remained high.
Every time President Trump announced a pause in tariffs, the market experienced sharp price swings. The stock market wiped out trillions of dollars in value after Trump’s initial reciprocal tariff orders, only to recover when there was a shift in rhetoric or a tariff halt.
Market analyst Arthur Hayes suggested that a potential devaluation of the Chinese yuan in response to Trump’s trade tariffs could drive capital into cryptocurrency markets. Hayes pointed out that similar devaluations in 2013 and 2015 saw Chinese investors moving capital from traditional investments to digital assets.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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