Trump pauses some tariffs, boosts China's

Key Points

  • US President Donald Trump announced a 90-day pause on tariffs for countries not retaliating with counter-tariffs, while increasing China's tariff rate to 125%.
  • The S&P 500 index surged nearly 7% following the announcement, reflecting high market volatility due to trade policy uncertainty.
  • The Volatility Index (VIX) spiked above 60, indicating extreme market fluctuations, though it later dropped to 37.5, still signaling significant volatility.
  • Market analyst Arthur Hayes suggested that a potential devaluation of the Chinese yuan could lead to capital flight into cryptocurrencies.

Summary

US President Donald Trump's recent tariff decisions have significantly impacted global financial markets. He announced a 90-day pause on tariffs for countries that do not impose counter-tariffs, while simultaneously increasing the tariff rate on China to 125% due to their retaliatory measures. This announcement led to a sharp rise in the S&P 500, with a nearly 7% increase, highlighting the market's sensitivity to trade policy changes. The volatility index, which measures market fluctuations, soared to its highest since August 2024, reflecting the uncertainty and potential for a prolonged trade conflict. Despite a slight decrease in the VIX, the market remains highly volatile. Additionally, market analysts like Arthur Hayes have speculated that these trade tensions could lead to a devaluation of the Chinese yuan, potentially driving Chinese capital towards cryptocurrencies, as seen in previous economic downturns.

cointelegraph
April 9, 2025
Crypto
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