Article Author: 0x9999in1, MetaEra
The Smoot-Hawley Tariff Act of 1930 left an unhealed scar on the world economy. The tariff war, waged in the name of "protecting domestic industries," ultimately evolved into a catastrophic contraction of global trade, intensifying the depth and breadth of the Great Depression. Nearly a century later, the specter of trade protectionism still lingers.
In April 2025, as the United States announced tariffs on Chinese goods rising to 125%, the global market once again felt a familiar chill. China's Ministry of Commerce swiftly responded, stating that if the U.S. continues its "tariff digital game," China will "pay no heed" and reserves the right to further retaliate. Meanwhile, the Trump administration extended an "90-day tariff pause" olive branch to 75 countries, reducing the general tariff rate to 10%, conspicuously excluding China, Mexico, and Canada. This highly targeted trade strategy not only dramatically increased the risk of economic decoupling between China and the U.S. but also placed the crypto market—the new battlefield of global capital flow—at a critical crossroads.
The Warning of the Smoot-Hawley Tariff Act
History never simply repeats, but always provides a certain warning. The tragedy of the Smoot-Hawley Tariff Act in the 1930s lay in the collective sinking of nations in a vicious cycle of retaliatory tariffs, ultimately leading to the collapse of the international trade system. As one of the most destructive trade policies of the 20th century, its historical lessons profoundly warn contemporary decision-makers that trade protectionism has never been a good remedy for economic difficulties. In 1930, when the U.S. Congress passed this act, raising import tariffs to a historical high of an average of 59%, the initial intention was to protect domestic industries impacted by the Great Depression, but it triggered a catastrophic chain reaction.
Global major trading partners quickly implemented retaliatory tariff measures, causing the international trade system to shrink by nearly two-thirds between 1929-1934, with U.S. exports plummeting by 70% and global unemployment rates further deteriorating. This policy not only failed to save the U.S. economy but prolonged and deepened the Great Depression, exposing the fatal flaw of trade protectionism: in a globalized economy, unilaterally erecting trade barriers inevitably leads to a "boomerang effect". More far-reaching was its destruction of the foundation for international multilateral trade cooperation, fostering economic nationalist sentiments and laying the groundwork for the subsequent collapse of the international economic order before World War II.
Trump's Tariff Stick Nearly a Century Later
The tariff war in 2025 differs from 1930 in that the United States is attempting to reshape global supply chains through a "selective tariff war"—pressuring China to the extreme while temporarily easing tensions with most countries. This "divide and conquer" strategy may seem clever but harbors hidden risks. As the world's second-largest economy, China is no longer the passive, weak trading nation of the 1930s. After the U.S. announced tariff increases, China did not immediately retaliate equivalently but instead coldly treated the matter with a "pay no heed" attitude while accelerating its "de-dollarization" strategy. This strategic resolve made the market realize that the new round of trade war might not evolve into the comprehensive melee of the 1930s, but rather a more prolonged war of attrition.
Crypto Market's Inherent "Liquidity" Sensitive Constitution
The Trump administration's "Liberation Day" tariff policy triggered violent fluctuations in the global financial market, with the crypto market suffering a comprehensive impact. Bitcoin dropped from $83,500 to $74,500, Ethereum fell even more dramatically from $1,800 to $1,380, and the total market capitalization of Altcoins was slashed by over 40%. Market liquidity significantly contracted, with Bitcoin's monthly capital inflow plummeting from a peak of $100 billion to $6 billion, and Ethereum turning to a net outflow of $6 billion. Although a large-scale "surrender selling" occurred, as prices descended, the scale of losses gradually reduced, indicating that short-term selling pressure might be exhausting.
From a technical perspective, $93,000 becomes the critical resistance level for Bitcoin to regain upward momentum, with the $65,000-$71,000 range being the core support zone that bulls must defend (data cited from glassnode). The current market has entered a critical stage; breaking through the support level could cause most investors to fall into floating losses, potentially triggering more intense market adjustments. Overall, the crypto market is extremely sensitive to global liquidity changes, and the uncertainty brought by this tariff policy has caused widespread impact. Whether the market can stabilize will depend on subsequent policy directions and capital inflow.
In conclusion, the crypto market is both a passive recipient and an active variable in this game. Consider this: when international situations are tense and the global monetary system is in turmoil, where else can investors seek a scarce, global, digital value storage mechanism not controlled by any government or entity? Perhaps, when the credibility of the old order is eroded by trade wars, the seeds of a new system quietly begin to sprout.
