On April 2, 2025, Wednesday, a key node in the global financial market is destined to emerge. US President Donald Trump will announce a highly anticipated reciprocal tariff policy at the White House Rose Garden. As White House Press Secretary Levitt stated, this policy will "reverse unfair trade practices that have exploited the United States for decades" and be implemented in a "nation-based" manner, with Trump also "promising" to introduce tariffs for specific industries at a future time.
As soon as the news broke, market sentiment quickly heated up, with the safe-haven asset gold breaking through a historical high, US stocks swinging in uncertainty, and the crypto market - especially BTC - unable to remain unaffected. Combining the latest research reports from Goldman Sachs and Morgan Stanley, we might explore the potential direction of this tariff storm and its profound impact on the global economy and crypto market.
Background: The "Fair" Logic of Reciprocal Tariffs and Market Unease
Trump's reciprocal tariff policy is not a sudden whim, but a continuation of his long-term trade philosophy. From his campaign period to his first term, Trump has raised the banner of "America First", repeatedly emphasizing trade fairness. He believes that the United States has long been at a disadvantage in international trade, with foreign exports to the US enjoying low tariffs, while US products face high tariffs and non-tariff barriers, leading to continuously expanding trade deficits. In 2024, the US goods trade deficit exceeded 1 trillion dollars, which undoubtedly provides a realistic basis for Trump's new policy.
The core logic of reciprocal tariffs seems simple: whatever tax you impose on me, I will impose the same on you. However, the actual implementation is far from that straightforward. Morgan Stanley's Global Fixed Income Research Director Michael Zezas noted in his March 31 report that investors are confused about the tariff policy on April 2. Previously, the Trump administration repeatedly adjusted tariffs on Mexico, Canada, and China, and the policy's uncertainty has left the market at a loss. More complexly, the Trump team seems to be weighing whether to include foreign consumption taxes (such as VAT) and non-tariff barriers in the reciprocal tariff calculation. This ambiguity makes it difficult for investors to develop clear response strategies.
Goldman Sachs' report further reveals potential economic risks. The report indicates that if the tariff policy is too aggressive, it could lead to increased US inflation, slowing economic growth, and even raise the recession risk from the current 25% to 35%. The S&P 500's earnings forecast has been downgraded, with earnings per share (EPS) dropping from $250 to $245, and the growth rate declining from 15% to 13%. Meanwhile, risk-averse sentiment has pushed gold prices to a new high, showing that market uncertainty has reached its peak.
The "Spillover Effect" in the Crypto Market: BTC and US Stocks' High Correlation
For the crypto market, Trump's tariff policy is not a distant macroeconomic event, but a potential "butterfly effect" that could trigger a chain reaction. In recent years, BTC's high correlation with US stocks (especially the S&P 500) has become a market consensus. 2024 data shows that BTC's 90-day correlation coefficient with the S&P 500 is as high as 0.85, meaning that US stock fluctuations often drive BTC to move in the same direction. The potential S&P 500 decline mentioned in the Goldman Sachs report (if an economic recession occurs, the index might drop to 4500 points, a decline of about 12%) undoubtedly sounds an alarm for BTC.
This correlation has its logic: while BTC is often viewed as "digital gold", its price is more driven by risk asset sentiment rather than pure hedging demand. During economic slowdowns or market panic, investors tend to sell high-risk assets (including BTC) to obtain cash or safer assets (like US Treasury bonds). In early 2025, BTC prices once broke through $110,000, but as tariff uncertainty heated up, its price has fallen back to around $82,000, demonstrating the market's sensitivity to risk.
Morgan Stanley Analysis: From Mild to Aggressive, Three Possible Tariff Scenarios
To more clearly understand the tariff policy Trump might announce on Wednesday, we can refer to Morgan Stanley's analysis framework, dividing potential outcomes into three scenarios: high clarity and low tariffs, low clarity and high commitment, and high clarity and high tariffs. Each scenario will have drastically different impacts on the economy and market.
Scenario One: High Clarity, Low Tariff Increase
If Trump provides highly clear policy details on April 2 with a relatively small tariff increase, and clearly states that he will not further expand the tariff scope, the additional economic impact might be relatively limited. The "nation-based" tariffs mentioned by Levitt may mean that the US will set reciprocal tax rates based on each trading partner's average tariff level, rather than making significant adjustments to specific products or industries. For example, if a country's average tariff on US exports is 5%, the US might also impose a 5% tariff on imports from that country.
In this scenario, market uncertainty will significantly decrease, and investors might breathe a sigh of relief. US stocks might see a rebound, especially tech stocks and cyclical industries previously dragged down by tariff concerns. However, the Goldman Sachs report reminds us that even without new significant tariffs, existing tariffs (such as the 25% tariff on Canada and Mexico in early February and the 10% additional tariff on Chinese goods) will still put pressure on the economy. The US GDP growth rate in 2025 might be only 1.5%, far below the long-term average.
Scenario Two: Low Clarity, but Promise of Significant Tariff Increases
The second scenario is more uncertain. If Trump's statement lacks specific details but promises significant future tariff increases, the market might fall into deeper fog. Levitt mentioned that Trump plans to implement industry tariffs at a future time, which might include critical areas like automotive, pharmaceutical, and semiconductor industries. This "drawing a big pie" strategy might aim to force trade partners to make concessions through negotiations but could also lead to intensified market panic.
In this case, investors might choose to wait and see, rather than immediately adjusting their investment portfolios. The S&P 500 index might continue to oscillate around its current level, making it difficult to break through the resistance level (the 5300 points mentioned in the Goldman Sachs report). Meanwhile, the US dollar might strengthen due to safe-haven demand, but rising inflation expectations might force the Federal Reserve to cut rates early. Goldman Sachs predicts that the Federal Reserve might cut rates three consecutive times in July, September, and November 2025, reducing the federal funds rate from the current 4.25%-4.5% to 3.5%-3.75%.
Scenario Three: High Clarity, Significant Tariff Increases
The most extreme scenario is that Trump announces a clear and aggressive tariff policy, with tax rate increases exceeding expectations, and even incorporating foreign consumption taxes and non-tariff barriers into the calculation. For example, if a country imposes a 20% tariff on US automobiles and adds VAT, the US might impose an equal or even higher tariff on that country's goods to "punish" non-tariff barriers. This aggressive policy might cause the average tariff rate to rise by 15 percentage points (Goldman Sachs' prediction on March 30), with an immediate impact on the economy.
In this scenario, the U.S. economic outlook will significantly deteriorate. Consumer prices may rise, real income will decrease, and corporate investment willingness will further decline. Morgan Stanley points out that in this situation, fixed-income assets (such as bonds) will be relatively beneficial, while the stock market may drop significantly, especially technology and cyclical stocks. Goldman Sachs' research report scenario analysis also shows that if the economy falls into recession, the S&P 500 index could drop to 4500 points, a decline of about 12% from current levels.
Hedging Logic in the Crypto Market: Gold Rises, Bitcoin Falls?
The rising risk-averse sentiment mentioned in the Goldman Sachs report (gold breaking new highs) also provides an interesting comparison for the crypto market. Traditionally, gold is viewed as the ultimate safe-haven asset, and Bitcoin is often promoted as "digital gold". However, reality is not so simple. In the first quarter of 2025, gold prices rose 19%, while Bitcoin dropped 15% during the same period, indicating that in the face of true macroeconomic risks, Bitcoin's hedging attributes have not yet been fully recognized by the market.
For blockchain investors, this is a phenomenon worth pondering. Bitcoin's long-term value proposition (decentralization, inflation resistance) may be validated in the future, but in the short term, its price is more driven by macroeconomic conditions and market sentiment. Inflationary pressures triggered by tariff policies may push up expectations of Federal Reserve rate cuts, and a low-interest-rate environment typically benefits assets like Bitcoin. Therefore, if Trump's tariff policies ultimately lead to an economic hard landing, Bitcoin may experience a short-term decline followed by a long-term rebound.
Market and Investor Response Strategies
Facing so much uncertainty, how should investors respond? Goldman Sachs recommends overweighting high-quality stocks and defensive sectors (such as healthcare and consumer staples), and for crypto investors, flexibility and risk management are equally important. Here are a few suggestions:
· Pay attention to the correlation between Bitcoin and U.S. stocks: If the S&P 500 declines, Bitcoin may follow suit, and investors can reduce risk exposure in the short term while waiting for clearer policy signals.
· Diversify investments: Besides Bitcoin, pay attention to the stability and returns of stablecoins or DeFi projects to hedge market volatility.
· Long-term perspective: If tariff policies accelerate Federal Reserve rate cuts, a low-interest-rate environment may provide long-term support for Bitcoin, making it suitable for buying on dips.
Global Perspective: Reactions of Trading Partners and Blockchain Industry Chain Effects
Trump's reciprocal tariff policy not only affects the U.S. economy but may also trigger dramatic adjustments in the global trade landscape. Major trading partners like Canada, Mexico, and the EU have indicated they will impose retaliatory tariffs, while China may retaliate by restricting rare earth exports. This will have far-reaching impacts on global technology supply chains, especially the semiconductor industry. The blockchain industry heavily relies on chips (used for mining equipment and data centers), and if supply chains tighten, miner costs may rise, affecting Bitcoin network hash rates and prices.
Trump's reciprocal tariff policy is undoubtedly a heavyweight bomb for the global economy and crypto market in 2025. Whether it's a mild adjustment or an aggressive escalation, Wednesday's statement will provide some market clues, and investors need to quickly interpret and adjust strategies. Based on analyses from Goldman Sachs and Morgan Stanley, slowing economic growth and rising inflation are almost certain trends, and Bitcoin may follow U.S. stock market fluctuations in the short term but still has long-term rebound potential. On April 2nd, will the roses in the Rose Garden wither under the cold wind of tariffs? For crypto investors, this might be a moment both dangerous and full of opportunities.
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