TLDR
- White House signals targeted approach to April 2 tariffs, omitting sector-specific duties while implementing “reciprocal tariffs” on major trading partners
- Bitcoin gained 2.7% following these reports, trading above $86,700
- Trump hints at “flexibility” for China despite moving forward with global tariff plans
- Markets entered correction territory with S&P 500 experiencing fifth straight week without gains
- Economic forecasts have been revised downward, with OECD lowering US GDP projections from 2.4% to 2.2% for 2025
Bitcoin prices climbed above $86,700 on Sunday following reports that the Trump administration plans to take a more targeted approach to its April 2 tariff implementation. This shift in strategy has eased concerns about widespread economic disruption that had previously weighed on crypto markets.
Reports from Bloomberg and the Wall Street Journal on Sunday afternoon revealed that the White House is narrowing its tariff strategy. The administration will likely omit sector-specific duties while still implementing “reciprocal tariffs” on major trading partners.
Bitcoin gained as much as 2.7% after these reports emerged. The leading cryptocurrency showed resilience after a volatile week that saw prices drop as low as $81,200.
The total crypto market has followed Bitcoin’s upward movement. Data from CoinGecko shows Bitcoin up 3.3% for the day, while the broader market cap increased by 0.7%.
Tariff Plans Taking Shape
President Trump previously declared April 2 as “Liberation Day,” when he planned to impose sweeping tariffs across multiple sectors. He posted on Truth Social that April 2 would be when the U.S. seeks “to impose massive trade duties on any and all nations that have imposed duties on U.S. exports.”
The administration now seems to be taking a more measured approach. Treasury Secretary Scott Bessent indicated last week that tariffs would apply to “about 15% of nations with persistent trade imbalances with the U.S.”
This economic policy shift comes after the Federal Reserve’s recent decision to hold interest rates steady. Additionally, the Consumer Price Index showed cooling inflation at 2.8% in February, which some investors view as signs of easing financial conditions.
Trump hinted at some flexibility in his tariff plans during Oval Office remarks on Friday. “I don’t change. But the word flexibility is an important word,” Trump said. “Sometimes it’s flexibility. So there’ll be flexibility, but basically it’s reciprocal.”
The president specifically mentioned China, suggesting there would be room for “talk” on trade issues. He expressed hope to meet with Chinese President Xi Jinping soon.
Economic Impact Concerns
Despite the more targeted approach, financial markets have reacted strongly to Trump’s tariff plans. The S&P 500 entered correction territory, declining more than 10% from recent highs.
The benchmark index was set for its fifth straight week without gains. It finished at levels last seen in September as forecasters reduced their outlooks for gross domestic product.
A study from Bloomberg shows that Trump’s implemented or threatened tariffs have affected at least $1.8 trillion in global trade. These include 25% duties on worldwide steel and aluminum, 25% on non-compliant USMCA goods, and an additional 10% on Chinese imports.
The Organisation for Economic Co-operation and Development has revised its U.S. GDP forecasts downward. The OECD lowered projections from 2.4% to 2.2% for 2025 and from 2.1% to 1.6% for 2026.
Global GDP was also revised lower, from 3.3% to 3.1% in 2025 and 3.3% to 3.0% in 2026. The OECD cited “higher trade barriers in several G20 economies and increased geopolitical and policy uncertainty” as factors “weighing on investment and household spending.”
The European Union announced it was delaying its retaliatory tariffs on U.S. goods. This delay aims to allow for “additional time for discussions with the U.S. administration.”
However, the EU clarified it was not seeking to “diminish the impact of our response.” The bloc continues to prepare for retaliation of up to €26 billion.
Federal Reserve Chair Jay Powell noted that tariffs could impose “transitory” price increases on consumers and businesses. “Some near-term measures of inflation expectations have recently moved up,” Powell said Wednesday.
Powell added that survey respondents, both consumers and businesses, are mentioning tariffs as a driving factor. He also pointed out that the on-again, off-again tariffs had increased overall uncertainty in the economy.
Gregory Daco, chief economist for the EY-Parthenon consultancy, warned of potential stagflation risk. This economic condition combines price growth with rising unemployment.
Daco noted that private-sector surveys have turned negative in recent weeks “due to broad based policy uncertainty & tariffs implementation.” He observed that “consumer sentiment has plunged, small business uncertainty is near record highs, purchasing managers are increasingly downbeat, and consumer inflation expectations are surging.”
Bitcoin’s Market Response
While tariffs do not directly impact Bitcoin prices in the short term, they contribute to broader market sentiment. Zach Pandl, head of research at Grayscale, told Decrypt that Trump’s trade policies are part of a larger trend.
Pandl explained that Bitcoin is being “swept up in broader macro uncertainty.” This suggests that “higher policy uncertainty has caused investors to reduce portfolio risk across the board.”
The recent gains in Bitcoin prices indicate that the market views the more targeted tariff approach as less disruptive than initially feared. The cryptocurrency has been responsive to macroeconomic developments throughout 2025.
Last week, an ECB official commented on Trump’s crypto initiatives. The official stated that financial crises “often originate in the United States and spread to the rest of the world.”
Bitcoin’s price movement on Sunday demonstrates the cryptocurrency’s continued sensitivity to global economic policy shifts. The market will be watching closely as April 2 approaches to see exactly how the Trump administration implements its tariff strategy.
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