Bitcoin’s price fell below $77,000 as the US government confirmed a 104% tariffs on goods imported from China.
President Trump’s announcement has heightened trade tensions that have destabilized global markets since April 2nd.
Stock Indices Reverse Gains Amid Trade War Fears
The tariff announcement created volatility in risk-based assets.
The S&P 500 and Nasdaq initially increased by approximately 4% intraday but then decreased, losing most of their earlier gains.
Bitcoin Recovers Briefly Before Further Decline
Bitcoin mirrored the stock market’s fluctuations.
It briefly rose above $80,000 before reversing direction and dropping below $77,000.
Pre-Tariff Talks Offer Temporary Market Relief
Prior to implementing the tariffs, President Trump discussed trade with allies including South Korea and Japan, briefly increasing market optimism.
The White House reported that around 70 countries expressed interest in trade agreements, with President Trump calling the discussions efficient.
Confirmed Tariffs Proceed Despite Negotiations
Despite these discussions, President Trump affirmed the 104% tariffs on Chinese imports would be implemented, taking effect at midnight on April 9th.
China Responds Firmly to US Trade Measures
China responded on Monday to earlier US tariff threats by stating it would “fight to the end” and rejected what it described as “US blackmail,” indicating a lack of willingness to compromise.
Recession Forecasts Increase Due to Trade Uncertainty
The economic consequences of the trade dispute have increased concerns about an economic slowdown.
Goldman Sachs has increased its US recession forecast to 45%, citing tighter financial conditions and growing uncertainty related to trade.
JPMorgan Projects Future Federal Reserve Rate Cuts
JPMorgan now anticipates the Federal Reserve will start lowering interest rates beginning in June 2025.
They predict rate cuts at each meeting, plus an additional cut in January, lowering the target policy rate upper limit to 3%.
Analysts Highlight Economic Risks and Investor Shifts
According to a Bloomberg report, David Rolley of Loomis Sayles stated tariffs are “the only tax they can hike.”
Pramila Agrawal from Loomis Sayles estimates a 60% recession probability.
Andrea Dicenso of Loomis Sayles noted investors are moving investments to European and Latin American markets, viewing them as more stable than the US.
Also Read: Trump Tariff Threat to China Escalates Trade Tensions
