Equities and digital assets lost steam by Tuesday afternoon as the White House affirmed that tariff rates on Chinese imports would climb to 104%. The escalation marks a dramatic turn in U.S.-China trade tensions, rattling global markets and crypto investors alike.
Markets Whipsaw as Trade War Deepens
By 2 p.m. ET on April 8, early gains across the NYSE, Nasdaq, Dow Jones, and S&P 500 had been erased. The crypto market shed 2.5% over 24 hours, bringing its total capitalization to $2.43 trillion. Bitcoin briefly touched $76,500 before recovering above $77,000. Gold remained under $3,000, trading at $2,981 per ounce.
President Trump had warned China could face tariffs as high as 50% unless it withdrew retaliatory measures. That figure ultimately doubled to 104%, effective at midnight. According to CNBC, the White House confirmed the new rate. China responded with 34% counter-tariffs and accused the U.S. of “blackmail.”
Beijing Digs In as Rhetoric Heats Up
The New York Times reported that President Xi Jinping shows no intention of backing down. China’s Ministry of Commerce vowed to “fight to the end,” condemning Washington’s tactics. Trump took to Truth Social, claiming China “wants to make a deal badly,” but that they don’t know how to start. He said, “We are waiting for their call. It will happen.”
Fed Emergency Cut Odds Rise
Austan Goolsbee, president of the Chicago Fed, called the tariff measures “way bigger” than expected and warned that policymakers may need to act swiftly. He pointed to the painful lessons of runaway inflation. On Polymarket, the probability of an emergency rate hike by the Federal Reserve climbed 3 percentage points on Tuesday.
The 104% tariff dramatically raises the stakes in the U.S.-China trade conflict, threatening to push import prices higher and stoke renewed inflation. Bitcoin and other risk assets face headwinds as uncertainty mounts. Investors are closely watching for any signs of diplomatic progress or Fed intervention.