The New Cold Trade War: China, Trump, and a Tariff Spiral
Weekly Market Recap: This week, the global economic spotlight fell again on US–China tensions, as trade policy took a sharp turn. On April 9, Donald Trump announced a temporary 90-day tariff truce with all countries, except China. Most tariffs were reduced to 10%, but tariffs on Chinese goods shot up to 145%. Trump said this was because over 75 countries reached out without retaliating. China responded quickly and harshly.
Beijing not only matched the rhetoric but also announced new tariffs of up to 125%, with further escalation planned. By April 11, China’s tone had shifted: it declared it would ignore the US completely if additional tariffs continued. A few hours later, Trump said “something positive will happen” with China, leaving many confused: was this war, negotiation, or performance?
Meanwhile, the Chinese yuan fell to its lowest level in 18 years, raising fears of more currency stress. As the tariff war escalates, Europe is trying to secure more gas from the US, hinting at a possible realignment of global alliances.
Source | Tradingview
Markets Swing as Trump Turns the Dial
Markets reacted with wild optimism, then deep uncertainty.
After Trump’s tariff truce announcement, Wall Street surged. The S&P 500 jumped 7%, BTC pumped, the fear index (VIX) dropped over 30%, and some traders declared a new bull run. But many weren’t convinced. One question echoed across investor chats: Is this a real rebound or just a dead cat bounce?
Earlier in the week, over $1.5 trillion was wiped from US markets, partly due to fears of global economic breakdown. But by the end of the week, markets were pricing in hope again, helped by weaker inflation data and hints of Fed intervention.
📉 US Economy Wobbles: Inflation Down, Jobs Down, Fed Cornered
Economic signals from the US painted a picture of fragility.
- Consumer Price Index (CPI) dropped to 2.4%, below expectations.
- Core CPI also cooled to 2.8%.
- Producer Price Index (PPI) came in much weaker than forecast: -0.4% month-over-month, the lowest in months.
While this was good news for inflation-watchers, other numbers were alarming:
- ISM Services Index fell to 50.8, lowest since June 2024.
- Employment component collapsed to 46.2, worst since December 2023.
JPMorgan warned that the Fed may be forced to cut rates before its next meeting, and a Fed official confirmed they’re ready to act if things worsen. Bond yields are climbing. The 10-year US bond is expected to hit 5% soon. People are starting to ask: Who will break first? Trump, China, or the bond market?
Crypto: Regulation Heats Up
The crypto sector faced regulatory and financial crosswinds this week.
The US SEC issued new guidance on how it plans to apply securities laws to crypto. The update came just days after OpenSea publicly asked the SEC to exempt NFT marketplaces from securities regulations.
Meanwhile, President Trump signed an order reversing an IRS rule that targeted DeFi protocols, offering temporary relief for decentralized platforms. This unexpected move gave some breathing room to developers, but raised more questions about consistency in US crypto policy.
But not everything was regulatory. Mastercard partnered with Kraken, enabling crypto payments at 150 million merchants globally, especially in Europe. And Standard Chartered teamed up with OKX, launching tokenized money market funds as collateral for institutional players. These are quiet signs of crypto infrastructure maturing in the background.
However, on the financial front, it was rough:
- MicroStrategy, the biggest corporate Bitcoin holder, may have to sell BTC at a loss.
A new SEC filing shows the company holds $8.22B in debt, pays $35.1M in interest, and owes $2.28B in deferred taxes tied to Bitcoin gains. If BTC drops further, they may be forced to sell. - According to CryptoQuant, short-term Bitcoin holders are losing more now than during the FTX collapse. Some call this a signal of capitulation, a phase that often marks the end of a bear cycle.
AI in Crypto: Hype Fatigue Settles In
Eric Turner, CEO of Messari, expressed deep disappointment with the AI wave in crypto.
He said most AI-related crypto tokens were just “coins wrapped in ChatGPT”, and while he believes AI agents and AI infrastructure are powerful, he hasn’t seen a project that truly impresses him.
This could be the start of a shift: from AI hype to AI reality. Developers may need to prove actual utility soon, or watch investors move on.
Middle East Headlines: Binance Scores a Win in Bahrain
The Central Bank of Bahrain granted a license to BPay Global, a Binance affiliate, allowing it to operate as a payment service provider in the country.
This is one of the few good news pieces for Binance lately, as global regulators keep tightening the screws. It signals Binance’s resilience in the Gulf region, even as scrutiny mounts elsewhere.
Stray Quotes, Strong Reactions
The week was filled with strange, loud, and controversial quotes.
- Trump said “Now is the perfect time to buy!” A line that echoed through crypto circles.
Source | TruthSocial @realDonaldTrump
- He also insisted he’s not crashing markets on purpose, but suggested “sometimes you need to take medicine.”
- In another bold claim, he said: “Countries are kissing my ass to make trade deals.”
- One Japanese political leader called for BOJ to cut rates if tariffs suffocate Japan’s economy.
- Meanwhile, White House advisor Kevin Hassett stressed that the Fed remains independent, despite the noise.
Conclusion: A World Holding Its Breath
This week didn’t offer answers. It offered tension wrapped in optimism, decline hidden in rallies, and regulation chasing innovation. Whether it’s the US–China chess game, Wall Street’s mood swings, or crypto’s identity crisis, one thing’s clear:
Everyone is waiting for someone else to blink first.
This article is not financial advice. Always do your own research—seriously, dig deeper on blog.millionero.com to get smarter about the space. When you’re ready, you can come trade spot and perpetual futures over at Millionero.