Global financial markets on fire as trade tensions escalate

The global financial market is experiencing a period of intense volatility after President Donald Trump announced a new series of tariffs aimed at addressing the United States' trade deficit. According to the executive order signed on April 1, 2025, the United States has imposed a 10% tariff on all countries, effective from April 5, 2025.

Stock and Cryptocurrency Markets Plunge

Immediately after the announcement, the cascading impact caused the U.S. stock market to witness a sharp decline. The Dow Jones, S&P 500, and Nasdaq all dropped significantly, reflecting investors' concerns about the negative impact of tariffs on the economy. The S&P 500 fell 5.75%, closing at 505.28 USD, while Nasdaq dropped 6.09%, down to 422.67 USD.

The cryptocurrency market was not exempt from this trend. Bitcoin plummeted below 78,000 USD, altcoins collectively nosedived, pulling the total market capitalization down to 2.57 trillion USD – evaporating over 253 billion USD in just 24 hours. More than 280,000 traders were liquidated, with a total value of 853 million USD, of which over 87% were Longing positions – a testament to the widespread psychological shock. The Fear & Greed Index plunged to 23 – an "Extremely Fearful" state.

Reactions from Countries and Industries

The U.S. new tax policy has raised concerns for many countries, especially economies dependent on exports to the U.S. In Vietnam, experts estimate that a 46% tariff could affect 37.5 billion USD in export value, equivalent to about 2% of the country's GDP.

U.S. Commerce Secretary Howard Lutnick stated that around 50 countries have contacted to negotiate tariffs, but emphasized that these rates will be implemented as planned.

In the fashion industry, trade groups warn that tariffs will increase prices for items like shoes and clothing, directly impacting U.S. consumers.

President Trump's Perspective

Amid the chaos, U.S. Treasury Secretary Scott Bessent revealed that over 50 countries have entered negotiations since the U.S. announced the new tax policy. This made Trump confidently assert that this is a "great pressure move", creating a significant advantage on the global trade chessboard. However, details about the negotiation process and results are being kept secret, further unsettling the market.

The data is on our side. President Trump's plan will reindustrialize the United States, revitalize the private sector and raise wages for hardworking Americans.pic.twitter.com/8pLTNtETSF

— Secretary of Treasury Scott Bessent (@SecScottBessent) April 6, 2025

Despite opposition and concerns from the market and partner countries, President Trump remains steadfast in his policy. He compared imposing tariffs to taking medicine, believing it is a necessary measure to address the United States' long-standing trade deficit.

Trump did not hide his pride: "Import tariffs are bringing in tens of billions of dollars for America. We will quickly reverse the situation – and one day, people will realize this is the most brilliant strategy the United States has ever applied." Meanwhile, investors continue to brace themselves for the unending red storm.

Impact on Developing Countries

Small and developing countries like Cambodia, Bangladesh, Laos, and Sri Lanka are facing the risk of economic instability due to high tariffs from the United States. These tariffs could weaken already fragile economies and increase debt burdens.

Conclusion

The United States' new tariff policy is creating shockwaves in the global financial market, affecting many countries and industries. While the Trump administration believes this is a necessary measure to protect national economic interests, many experts and world leaders are concerned about the long-term negative impacts on the global economy.

Compiled by VIC Crypto

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