TLDR
- Donald Trump has indicated plans to lower the 145% tariffs on China to secure a fair trade deal
- Trump acknowledged current tariffs have effectively halted trade between the US and China
- Bitcoin is trading above $94,000 and might surge past $100,000 if US tariffs ease
- China appears open to trade talks following Trump’s announcements
- US-China tariff reductions could ease inflationary pressures, potentially benefiting crypto markets
Donald Trump has revealed plans to lower tariffs on China, sparking hopes for a major cryptocurrency market rally. The US President recently acknowledged that the current 145% levy on Chinese imports is too high and has effectively stopped trade between the world’s two largest economies.
“At some point, I’m going to lower them, because otherwise, you could never do business with them, and they want to do business very much,” Trump stated, according to a CNBC report. This potential shift in trade policy has caught the attention of crypto investors worldwide.
The US has imposed a 145% tariff on Chinese imports, while China has responded with a 125% tariff on American goods. These high rates have impacted markets and may trigger inflation, raising prices for manufacturing equipment and everyday items like clothing and toys that many Americans rely on.
Trump’s consideration of lower tariffs comes from the need to decrease costs for consumers and businesses. This move could benefit the US economy while potentially providing a boost to cryptocurrency markets.
Potential Impact on Cryptocurrency Markets
The crypto market has experienced volatility since Trump’s tariff announcements. Top cryptocurrencies including Bitcoin, Ethereum, and XRP have seen price fluctuations as investors react to the news.
Bitcoin’s recent price movements have been particularly interesting. After initially holding steady despite traditional market downturns, it dipped below $80,000 before recovering. Bitcoin is now trading above $94,000, with some reports suggesting it could surge past $100,000 if US tariff policies ease.
A reduction in tariffs could ease inflationary pressures and potentially reduce the need for interest rate hikes. Historically, such economic conditions have been favorable for cryptocurrency growth and adoption.
The connection between trade policy and crypto markets highlights how integrated digital assets have become with the broader economy. Investors are watching closely as trade discussions unfold.
US-China Trade Relations
Trump told reporters aboard Air Force One that US officials are speaking with Chinese officials about various matters. When asked if any trade agreements would be announced this week, he indicated that could “very well be” but provided no details.
The President has no immediate plans to speak with Chinese President Xi Jinping this week. However, recent developments suggest China is open to trade negotiations following Trump’s tariff announcements.
Trump has engaged in a flurry of trade policy actions since April 2. He imposed a 10% tariff on most countries, along with higher rates for many trading partners that were then suspended for 90 days.
In addition to the China tariffs, Trump has implemented 25% tariffs on automobiles, steel, and aluminum. He has also placed 25% tariffs on goods from Canada and Mexico.
In an NBC News interview taped Friday and broadcast Sunday, Trump sounded more optimistic about reaching an agreement with China. He acknowledged being “very tough with China,” essentially cutting off trade between the two economies.
“We’ve gone cold turkey,” Trump said. “That means we’re not losing a trillion dollars… because we’re not doing business with them right now. And they want to make a deal. They want to make a deal very badly. We’ll see how that all turns out, but it’s got to be a fair deal.”
Trump suggested that for countries where agreements aren’t reached, he might set “a certain tariff” in the next two to three weeks. This may refer to the reciprocal tariffs announced on April 2, set to take effect July 8 after a 90-day pause.
Bitcoin’s price currently stands above $94,000 as traders anticipate the potential impact of improved US-China trade relations.
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