Trump to Announce New Tariffs on April 2: How Will Crypto Markets React?

US President Donald Trump Donald Trump Donald Trump is an American former president politician, businessman, and media personality, who served as the 45th president of the U.S. between 2017 to 2021. Trump earned a Bachelor of science in economics from the University of Pennsylvania in 1968. Trump won the 2016 presidential election as the Republican Party nominee against Democratic Party nominee Hillary Clinton while losing the popular vote. As president, Trump ordered a travel ban on citizens from several Muslim-majority countries, diverted military funding toward building a wall on the U.S.–Mexico border, and implemented a family separation policy. Trump has remained a prominent figure in the Republican Party and is considered a likely candidate for the 2024 presidential election President is set to announce a new round of reciprocal tariffs on April 2, calling it the “liberation day” for the US economy. In a recent statement, he made it clear that he has no plans to soften his tough stance on trade policies.

This announcement follows the tariffs he imposed in February on Canada, Mexico, and China, which led to a sharp decline in the cryptocurrency market. That month, Bitcoin dropped by 17.5%. Now, investors are watching closely to see how this new round of tariffs might impact cryptocurrencies, especially Bitcoin.

The US Trade Deficit: A Longstanding Issue

The main goal of these tariffs is to reduce the US trade deficit, which has been growing since 1976.

In January, the US Balance of Trade increased from -98.06 USD Billion to -131.38 USD Billion. The US has the largest trade deficit in the world.  

According to the World Population Review, 15 countries account for most of the US trade deficit. These include China, Mexico, Vietnam, Ireland, Germany, Taiwan, Japan, South Korea, Canada, Thailand, India, Italy, Switzerland, Malaysia, and Indonesia.

Which Countries Will Be Affected?

In 2024, the largest deficit in the US was with China ($270.4B). The US had a trade deficit of $157.2B with Mexico, $113.1B with Vietnam, $80.5B with Ireland, $76.4B with Germany, $67.4B with Taiwan, $62.6B with Japan, $60.2B with South Korea, $54.8B with Canada, $41.5B with Thailand, $41.5B with India, $39.7B with Italy, $25.5B with Switzerland, $22.1B with Malaysia, and $16.4B with Indonesia. 

Trump’s recent statements suggest that he is determined to address this growing trade gap.

What to Expect from the New Tariffs

Reports suggest that the tariffs will mainly target countries with large trade surpluses and high barriers to US exports. However, there are rumors that the administration may take a cautious approach at first, possibly leaving out key industries such as automobiles, semiconductors, and pharmaceuticals.

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Will Crypto Markets Take Another Hit?

In February, the US government, under the leadership of Trump, introduced tough tariffs on China, Canada and Mexico. In the same month, the Bitcoin price declined by over 17.5%. 

At the start of February 1, the BTC price was at $102,314.57. On the last day of the month, it slipped to a low of $84,400. Currently, the Bitcoin price stands at $86,683. This clearly indicates that the market has not yet recovered from the impact of the February price drop. 

With the new tariffs approaching, analysts are divided on how the markets will react.

• If the tariffs are aggressive, stock and bond markets may fall, which could also drag down cryptocurrencies.
• If the tariffs are less severe or delayed, markets could see a recovery, and major cryptocurrencies like Bitcoin and Ethereum may regain strength.

As April 2 approaches, traders and investors are watching closely to see how Trump’s latest trade decision will shape the future of global markets.

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