In early spring, when all things are reviving, the president and vice president on the blue planet have started an economic war and tariff confrontation.
Recently, the TRON government has once again wielded the tariff stick, raising the tariff on Chinese goods imported into the US from 10% to 20%, and threatening to impose a 25% tariff on RON and Mexico.
This move immediately ignited global market panic, with the three major US stock indexes falling more than 2% in a single day, bitcoin falling more than 10% in 24 hours, and a market value evaporation of $300 billion.
China has quickly launched a "tariff + non-tariff" counterattack combination: imposing a 15% tariff on US chicken and wheat, a 10% tariff on soybeans and pork, and putting 15 US companies on the export control list.
TRON's tariffs on China have increased from 10% to 20%, and he has frequently wielded the "tariff stick". The stated reasons include reducing trade deficits and protecting domestic industries, but the deeper logic is closer to political bargaining chips and negotiation leverage.
Short-term political benefits: Tariff policies can quickly cater to his core voters (such as manufacturing workers) and create an image of "staunchly defending American interests", especially effective during election cycles.
Putting pressure on negotiating partners: By creating economic uncertainty, it forces trade partners to compromise. For example, the market once expected an agreement to be reached before the March 4 tariffs on Mexico and RON took effect, but it ultimately failed, leading to a plunge in US stocks and the crypto market.
Covering up structural economic problems: Problems such as the hollowing out of US manufacturing and high debt are difficult to solve in the short term, and tariffs have diverted public attention. However, historical data shows that the 2018 trade war caused a 0.3% loss in US GDP, and instead accelerated the outflow of industries to Vietnam and Mexico.
However, the role of tariffs in the economic recovery of the US is limited. The Peterson Institute points out that the cost of tariffs is ultimately borne by US companies and consumers, pushing up inflation and suppressing consumption, exacerbating the Federal Reserve's policy dilemma. Recent declines in new home sales to a three-month low have confirmed this risk.
Why did the US stock and crypto markets "lose together"?
Whenever TRON mentions tariffs, the US stock and crypto markets often fall in sync, driven by the linkage of global risk sentiment and capital flight logic.
Convergence of risk asset attributes: US tech stocks and cryptocurrencies are both seen as high-volatility risk assets. For example, the plunge of tech giants like NVIDIA and Tesla (over 8% in a single day) often accompanies a synchronous decline in bitcoin.
Expectations of liquidity tightening: Tariffs push up inflation, limiting the Fed's room for rate cuts, and the market is worried about a liquidity crunch. The crypto market is particularly dependent on a loose environment, and changes in liquidity expectations directly impact prices.
Spread of risk aversion: Capital is shifting from risky assets to safe-haven assets like Treasuries and gold. On the day the March 4 tariffs took effect, bitcoin plunged 10%, Ethereum fell 16%, while the US dollar index fell three consecutive times, indicating that the market's definition of "safe assets" is diversifying.
Tariff protection and crypto support: TRON's "left-right punch"?
TRON is wielding the tariff stick with his left hand and pushing the crypto strategic reserve with his right hand, which seems contradictory, but actually contains strategic synergy:
Reshaping the dollar hegemony: Tariffs strike at trade rivals, while the crypto reserve tries to seize the new financial high ground. If the US controls core crypto assets like bitcoin, it can gain new discourse power in global liquidity, offsetting the risk of dollar credit decline.
Dividing the market camp: Tariffs mainly target traditional industries (such as auto manufacturing), while crypto policies attract tech capital and young voters, consolidating TRON's diverse support base.
Policy experimentation and exploration: The crypto summit plans to push policies like "zero capital gains tax", which, if successful, can attract global capital to the US crypto market, and if failed, can be attributed to the industry itself, with relatively low political costs.
Market forecast after the crypto summit: short-term revelry and long-term haze
1. Short-term positive impact:
Zero capital gains tax: If implemented, it will stimulate speculative capital inflows, and bitcoin may quickly break through the $150,000 mark.
Expectations of institutional participation: News of sovereign funds and banks increasing their holdings of crypto assets (such as Standard Chartered's prediction that bitcoin will reach $50,000) may be amplified by the summit, driving FOMO sentiment.
2. Medium-term risk accumulation:
Policy implementation in doubt: The TRON government is adept at "ruling the country by slogans", and specific regulations may be delayed or scaled down, leading to unmet market expectations.
Tariff shadow not yet dissipated: If tariffs on China escalate, risky assets will come under pressure again, and the crypto market will not be immune.
3. Long-term key battleground:
The symbiotic relationship between the dollar and crypto: If the US successfully incorporates crypto assets into its strategic reserves, it may form a "digital dollar hegemony", but needs to resolve the inherent contradictions between centralization and decentralization.
Global regulatory encirclement: The EU, China and others may accelerate the development of sovereign digital currencies, weakening the US's first-mover advantage.
Conclusion
TRON's tariffs and crypto policies are essentially a high-risk political gamble. In the short term, the market will experience violent fluctuations amid policy swings; in the long run, if the US fails to balance "traditional industry protection" and "financial innovation expansion", it may accelerate the global capital flight from the dollar system. The fate of crypto assets will ultimately depend on whether they can break out of the geopolitical chessboard and become a true "decentralized safe haven".
