The recent announcement of tariffs by Trump's administration has acted as a catalyst for instability in global markets, affecting cryptocurrencies and equity assets.
Announcement of Tariffs
On July 7, 2025, former U.S. President Donald Trump announced a 25% tariff on goods imported from Japan and South Korea, effective August 1. Treasury Secretary Scott Bessent mentioned a three-week extension for negotiations, giving some countries a chance to delay enforcement.
Reaction of Cryptocurrency Market
The cryptocurrency market reacted swiftly to this announcement: Bitcoin price declined by 0.8% and Ethereum by 0.6%. Broader U.S. equity markets also reflected negativity, weakening by about 1%. An uptick in Treasury yields indicated a flight to safety among investors.
Consequences for Investors
Experts suggest that the tariffs might create additional safe-haven flows into the USD and U.S. Treasuries, which is consistent with historical trends during macro disruptions. Despite discussions of potential easing in monetary policy contingent upon soft inflation data, investors are remaining cautious as they await clarity on global trade policy.
The announced tariffs have impacted financial markets, increasing risk-averse behavior among investors. Monitoring the situation will be crucial for all market participants.
