Trump’s Trade Tariffs Continue to Cause Market Mayhem

Following the introduction by the US of 25% tariffs on all steel and aluminium imports

Trump’s trade tariffs continue to cause market mayhem in both traditional and crypto markets and analysts warn the chaos is likely to continue at least into April. It doesn’t bode well for BTC.

Following the introduction by the US of 25% tariffs on all steel and aluminium imports, the European Union (EU) yesterday announced plans to slap tariffs on US$28 billion (AU$44.2 billion) worth of US goods starting April 1. Analysts suggest this move could weaken global investors’ risk appetite even further and see Bitcoin’s price decline again, possibly even breaking its key support level of US$75,000 (AU$118,609).

There are also fears the EU’s retaliatory tariffs could spark a trade war with the US, as both sides repeatedly apply tit-for-tat trade restrictions, weakening markets further.

EU’s ‘Rebalancing Measures’ In Response To US Tariffs

The EU announced its retaliatory tariffs yesterday, immediately after the US announced it will be implementing its 25% tariffs on steel and aluminium products from the EU (as well as all other nations, including Australia).

The EU said it will begin imposing its “rebalancing measures” from April 1 of this year. These measures, which include tariffs against a range of US products, were partially introduced during Trump’s first term as president. This time “they’re going to be implemented in full,” the EU stated.

The goal of the EU’s response is to “ensure that the total value of the EU measures corresponds to the increased value of trade impacted by the new US tariffs.”

The Union's action comes in response to the administration's decision to impose a 25% tariff on all steel and a 10% tariff on aluminum imports, which the EU says will increase the price of the affected products by around US$2.4 billion a year.

The new tariffs will affect a range of products, including fruit, vegetables, tobacco, and travel goods, and are set to impact a significant portion of the US economy.

The announcement follows months of tension between the two economic superpowers, as they engaged in a tit-for-tat cycle of trade sanctions.

Earlier this year, the US threatened to impose tariffs on a vast array of European products in response to the EU's Airbus subsidies, while the EU planned to hit back with tariffs on US products in response to Trump's tariffs on steel and aluminum.

Finally, in March, the US administration decided to keep rolling over the tariffs on products from the Union, while imposing tariffs on products from other countries, including Australia.

The administration said its action was necessary to protect American jobs and ensure fair trade practices. However, the EU and other nations protested the tariffs, arguing that they would harm the global economy and spark a trade war.

The EU's decision to impose retaliatory tariffs is likely to further strain relations between the two allies, especially given the administration's history of unpredictable behavior.

The administration's actions have already led to increased prices for consumers and businesses alike, and the new tariffs are likely to add further inflationary pressure.

Moreover, the administration's actions have threatened to spark a wider trade war, as other nations have threatened to impose their own tariffs in retaliation for the US's actions.

The administration's economic policies have been a subject of heated debate, with some arguing that they are necessary to protect the US economy and jobs, while others maintain that they will ultimately damage the global economy and lead to a recession.

Only time will tell what the long-term impact of the administration's actions will be, but the immediate consequences are clear: increased tension, heightened inflation, and the threat of a broader trade war.

The EU’s ‘Stable’ Counter-Tariffs Despite Market Chaos

Speaking to Cointelegraph, Aurelie Barthere, principal research analyst at on-chain analytics platform Nansen, said the tariff disputes are likely to limit investor appetites for risk-on assets like Bitcoin until at least early April.

"The EU is planning to introduce tariffs of US$28 billion on US goods in response to the US's decision to keep 25% tariffs on steel and aluminum products from the EU and other countries, including Australia," said Barthere.

"This move could further dampen global investors' risk appetite and lead to a decline in the price of Bitcoin, which might even break its key support level of US$75,000."

However, both traditional and crypto markets seemed to have "tentatively" stabilised yesterday, Wednesday, March 29.

"The question now is whether this stability will hold, or if we're going to see another leg down in the markets," said Barthere.

"If the markets do manage to stabilise, we might see Bitcoin move sideways for a period of time, testing the crucial support level of US$7