Trump’s Tariffs: Impact On Global Trade And Crypto Markets

0
87
Trump’s Tariffs: Impact On Global Trade And Crypto Markets

U.S. President-elect Trump, in a Nov. 26 post, said that the international tariffs would stay ‘until Drugs, in particular, Fentanyl, and all Illegal Aliens stop this Invasion of our Country.’

Since 2015, Trump has vowed to change the trade rules, with Mexico in his crosshairs. If she did not stop the ‘onslaught of criminals and drugs’ crossing the border, he told Mexico’s President Claudia Sheinbaum, he would impose tariffs of at least 25%.

Later, in a separate post, he also threatened to slap another 10 percent tariff on all imports from China to punish the nation for not enforcing the death penalty for fentanyl dealers. During his term, Biden also imposed levies on top of the amount Trump’s tariffs would impose.

But analysts warn that Trump’s tariffs would likely raise the prices of goods and risk business disruption around the world.

What impact do tariffs have on the crypto market?

Tariffs are fiscal tools that raise import taxes, making imported goods more expensive. Tariffs are widely known to impact the global financial trade landscape and, correspondingly, fiat currency more directly; however, they also affect the crypto market.

This means that as tariffs increase the price of importing goods into other countries, the volume of imports will be lower, which will be helpful to domestic businesses. The result for consumers is that the overall living expenses will more than double due to an increase in goods’ prices without much demand, which is inflation.

It goes beyond that; having imposed tariffs, the accompanying trade tensions may result in economic uncertainty. You can see this with how the U.S. dollar increased by 0.4% after Trump threatened his tariffs, and the currencies of the countries affected, like China, Canada, and Mexico, dipped slightly.

Traditionally, financial markets have shuddered in the face of economic tension generated by America’s trade war with China and past bouts of inflation. In the wake of such uncertainty, BitcoinBTC-5.6% will have alternative assets on which traders rely.

One reason is to avoid the volatility of more traditional assets, which trade will inevitably influence. That’s why investors have often described Bitcoin as a ‘safe-haven’ asset.

Although inflation is destructive to the national economy, it is related to Bitcoin growth. For example, the 2018 to 2020 U.S.-China trade war, when the U.S. increased the costs of technology, especially electric vehicles, coming from China, finally spiked the Bitcoin price as more investors rushed to store their funds away from the volatile market.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.