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Why is Bitcoin Going Down? China’s 34% Tariff Deepens Market Decline

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Friday, 04/04/2025 | 14:19 GMT by
Jared Kirui

  • The tariff announcement has led to a broader market sell-off, with the S&P 500 and Nasdaq falling more than 2% and 3%, respectively.
  • The future direction of the trade war remains uncertain, with the U.S. and its allies, including the European Union, weighing their next moves.

bitcoins Huge bitcoin BTC logo in the front of speaking Donald Trumps

Global markets took a sharp hit today (Friday) after China
announced a 34% tariff on all U.S. goods, escalating tensions in the
ongoing trade war.

The move sent shockwaves through the global stock
markets and cryptocurrencies alike, with Bitcoin retreating from its early
gains to trade at $82,000 at the time of this publication. Investors are now bracing for further volatility as
fears of a prolonged economic standoff intensified.

Bitcoin and Stocks Take a Hit

China’s retaliatory tariffs, which came in response to
President Donald Trump’s decision to increase levies on Chinese imports to 54%,
spurred risk-off sentiment across global markets.

Bitcoin initially climbed to $84K before reversing
course, dropping 3% to $81K in the daily chart. Other cryptocurrencies,
including Ethereum (ETH), Solana (SOL), and Dogecoin (DOGE), also erased their
early gains, according to CoinMaketCap data.

Bitcoin price chart, Source: CoinMarketCap

Equity markets saw a similar reaction. S&P 500 and Nasdaq tumbled more than 2% and 3%, respectively, following the announcement,
signaling another rough session for Wall Street. Investors rushed to reassess
the economic fallout from the escalating trade war.

China’s Counteroffensive in the Trade War

The Chinese government’s tariff hike represents one of
its strongest responses yet in the prolonged trade dispute. In addition to the
34% tariffs, Beijing imposed new export controls on certain rare earth
materials, Reuters reported.

It also lodged a formal complaint with the World Trade
Organization (WTO) and added 11 entities to its “unreliable entity”
list, effectively barring them from certain business operations in China.

Friday’s market rout extended beyond the U.S. to other
major economies. In Japan, Prime Minister Shigeru Ishiba called the tariff war
a “national crisis” as Tokyo’s stock market neared its worst weekly
performance in years.

LIBERATION DAY RECIPROCAL TARIFFS ???????? pic.twitter.com/ODckbUWKvO

— The White House (@WhiteHouse) April 2, 2025

European equities also posted significant losses, with
investors watching closely for the European Union’s next steps. Firms
such as Adidas, Puma, and Pandora have seen their stock prices tumble as the tariffs target Southeast Asia, where many of these companies manufacture their
goods.

What’s Next?

With China’s countermeasures now in place, all eyes
are on the next move from the U.S. and its allies. The European Union has yet
to take a unified stance, with officials debating whether to activate its
‘Anti-Coercion Instrument,’ a policy designed to counter economic pressure from
third countries.

EU ready to retaliate against Trump’s tariffs, says von der Leyen https://t.co/lmKbwj51NQ

— Financial Times (@FT) April 3, 2025

For now, markets
remain on edge, and traders are preparing for further turbulence. Whether a
resolution is near or if the trade war will continue to spiral remains a
pressing question for investors worldwide.

Global markets took a sharp hit today (Friday) after China
announced a 34% tariff on all U.S. goods, escalating tensions in the
ongoing trade war.

The move sent shockwaves through the global stock
markets and cryptocurrencies alike, with Bitcoin retreating from its early
gains to trade at $82,000 at the time of this publication. Investors are now bracing for further volatility as
fears of a prolonged economic standoff intensified.

Bitcoin and Stocks Take a Hit

China’s retaliatory tariffs, which came in response to
President Donald Trump’s decision to increase levies on Chinese imports to 54%,
spurred risk-off sentiment across global markets.

Bitcoin initially climbed to $84K before reversing
course, dropping 3% to $81K in the daily chart. Other cryptocurrencies,
including Ethereum (ETH), Solana (SOL), and Dogecoin (DOGE), also erased their
early gains, according to CoinMaketCap data.

Bitcoin price chart, Source: CoinMarketCap

Equity markets saw a similar reaction. S&P 500 and Nasdaq tumbled more than 2% and 3%, respectively, following the announcement,
signaling another rough session for Wall Street. Investors rushed to reassess
the economic fallout from the escalating trade war.

China’s Counteroffensive in the Trade War

The Chinese government’s tariff hike represents one of
its strongest responses yet in the prolonged trade dispute. In addition to the
34% tariffs, Beijing imposed new export controls on certain rare earth
materials, Reuters reported.

It also lodged a formal complaint with the World Trade
Organization (WTO) and added 11 entities to its “unreliable entity”
list, effectively barring them from certain business operations in China.

Friday’s market rout extended beyond the U.S. to other
major economies. In Japan, Prime Minister Shigeru Ishiba called the tariff war
a “national crisis” as Tokyo’s stock market neared its worst weekly
performance in years.

LIBERATION DAY RECIPROCAL TARIFFS ???????? pic.twitter.com/ODckbUWKvO

— The White House (@WhiteHouse) April 2, 2025

European equities also posted significant losses, with
investors watching closely for the European Union’s next steps. Firms
such as Adidas, Puma, and Pandora have seen their stock prices tumble as the tariffs target Southeast Asia, where many of these companies manufacture their
goods.

What’s Next?

With China’s countermeasures now in place, all eyes
are on the next move from the U.S. and its allies. The European Union has yet
to take a unified stance, with officials debating whether to activate its
‘Anti-Coercion Instrument,’ a policy designed to counter economic pressure from
third countries.

EU ready to retaliate against Trump’s tariffs, says von der Leyen https://t.co/lmKbwj51NQ

— Financial Times (@FT) April 3, 2025

For now, markets
remain on edge, and traders are preparing for further turbulence. Whether a
resolution is near or if the trade war will continue to spiral remains a
pressing question for investors worldwide.

bitcoins Jared Kirui

  • 1892 Articles
  • 34 Followers

Jared is an experienced financial journalist passionate about all things forex and CFDs.

  • 1892 Articles
  • 34 Followers

Bitcoins
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