China’s 34% Tariff On US Imports: What To Know And Impact On Crypto Market

China has announced its retaliatory tariffs following Donald Trump’s reciprocal tariffs announcement on April 2, which sent shockwaves across the globe. This move would further escalate the ongoing global trade war and could significantly impact the crypto market.

China Announces 34% Tariffs On US Imports

In a press release, China’s Finance Ministry announced it would impose a 34% tariff on all US imports, starting on April 10. This move follows US President Donald Trump’s announcement of reciprocal tariffs on almost all countries on April 2.

Specifically, Trump announced a 34% tariff on Chinese goods, which has led to this retaliatory 34% tariff. The Chinese Ministry urged the US to cancel its unilateral tariffs and resolve trade differences through consultation in an “equal, respectful, and mutually beneficial manner.”

The Bitcoin price, which had rebounded to as high as $84,000 today, sharply dropped below $82,000 following China’s announcement. This move has further fueled the bearish sentiment in the crypto market following Trump’s announcement on Wednesday. It will also inflame the global trade war, which already exists between the US and other countries.

It is worth mentioning that European Commission President von der Leyen revealed that the European Union is prepared to respond with countermeasures if it is unable to reach an agreement with the US. As such, the crypto market could still witness more decline as the global trade war heightens.

Crypto Market Unlikely To Witness As Much Decline As Other Markets

Amid China’s latest move, crypto analyst Kevin Capital suggested that the crypto market is unlikely to witness as much decline as other markets. He noted that while crypto is only indirectly affected by tariffs unlike companies that make up the S&P 500 and other indices.

The analyst explained that crypto is still holding up well right now because Fed funds futures are now pricing in five rate cuts as monetary policy expectations drive the market. He added that crypto traders believe the Fed could rescue them.

However, Kevin Capital warned that things could take a drastic turn if Fed Chair Jerome Powell comes and banishes the idea of all these rate cuts. If that happens, he predicts the crypto market will likely catch up to the stock market in this ongoing decline.

On the other hand, if Powell entertains the idea of significant easing of monetary policy, then the analyst believes all eyes will be on the next CPI report next week, and the crypto market could continue to hold up against the stock market.

Indeed, the stock market has suffered a worse downtrend than the crypto market. The S&P 500 further declined after China announced 34% tariffs on US imports, wiping out over $1.5 trillion as soon as the market opened today.

Meanwhile, Bitcoin rebounded following strong US job data, proving Kevin’s theory that the crypto market may be concerned about the Fed’s policies rather than the ongoing global trade war.

Nevertheless, speculations of BTC price mirroring stock market movements also persisted across the broader sector, CoinGape reported.