Trade War Intensifies as US and China Clash Over Tariffs

And just as the United States and China are rekindling their trade conflict with increasing tariffs. This escalation is raising alarms in crypto and stock markets alike. This recent escalation marks a “new phase” of the trade war, contributing to rising threats to global financial stability.

On this day, the White House released a fact sheet, declaring tariffs of as high as 245% on Chinese imports. This re-escalation deepens worries about the ongoing trade war. Consequently, both the crypto and stock markets are reeling from financial unpredictability.

Li Chenggang is now China’s chief trade negotiator. He had served as the assistant commerce minister under US President Donald Trump’s first administration. Chenggang is known within a "very intense foreign business community."

We know at least one aspect of the markets is extremely correlated, as US equities and crypto have been extremely correlated since early November 2024. During the current correction of 2022 this correlation has flipped strongly to the downside as investors de-risk.

“We are now in a new phase of the trade war, with the focus on high-added-value sectors, Tech (and Pharma), and the zeroing in on US-China,” - Aurelie Barthere, principal research analyst at crypto intelligence platform Nansen.

“I also think this situation is negative for non-US equities,” - Aurelie Barthere, principal research analyst at crypto intelligence platform Nansen.

“investors de-risk, especially expensive assets,” - Aurelie Barthere, principal research analyst at crypto intelligence platform Nansen.

Ultimately, the recovery of both global equities and cryptocurrency markets will depend largely on the direction of global tariff negotiations. According to Nansen analysts it was a 70% chance to bottom by June 2025 before recovering.

“Crypto is reacting to macro news not because fundamentals have changed, but because positioning is thin and confidence is sensitive,” - analysts from Bitfinex exchange.

“Markets were on edge for any signal that the Fed might delay rate cuts due to sticky inflation or heightened geopolitical risk,” - analysts from Bitfinex exchange.