U.S. Market Rebounds Sharply After Trump’s 90-Day Tariff Freeze

Markets exploded upward in response to President Trump’s unexpected late-night announcement on April 9 (U.S. time), pausing the implementation of new tariffs for most trading partners for 90 days. The move was framed as a strategic opening for negotiation and trust-building. However, China remains singled out, facing an immediate hike in U.S. tariffs to 125%.

The S&P 500, Dow Jones, and Nasdaq all posted significant gains, with Nasdaq spiking over 12%. U.S. equities added over $4 trillion in market capitalization within 10 minutes of Trump’s message going live on social media. Futures remained green, signaling further upside, while gold surged to $3,097/oz and crude oil rebounded to $63/barrel.

Bitcoin and Crypto Rally With Global Risk Sentiment

Bitcoin followed equities upward, hitting $83,300 before pulling back slightly. Leading altcoins also posted strong gains. Total crypto market capitalization climbed to $2.739 trillion. While the momentum was largely driven by macro news, some institutional flows remained weak. U.S. spot Bitcoin ETFs recorded $127.2 million in net outflows on April 9, while Ethereum spot ETFs saw $11.2 million leave the market.

Despite the ETF pullbacks, the broader crypto market responded positively to reduced uncertainty and increased investor optimism. The 90-day window creates room for further macro support, especially if the Fed pivots in coming weeks under Trump’s mounting pressure.

Trump’s Tariff Strategy: A Global Carveout, China in the Crosshairs

President Trump’s message emphasized two tracks: tariff negotiations with over 75 nations and a hardline stance on China. Citing "a lack of respect for global markets," Trump formally raised tariffs on Chinese imports to 125% effective immediately. Meanwhile, countries that refrained from retaliating against U.S. measures have been granted a 90-day reprieve with a reduced baseline tariff of 10%.

White House officials did not release the full list of exempted countries. However, the message was clear: those who approached Washington in good faith over the past week were rewarded, while China was definitively excluded.

The phrase “don’t retaliate and you will be rewarded” has become a mantra from Washington, reinforcing Trump’s trade-by-pressure approach. According to USTR, the tariff freeze is an incentive for cooperation, not a retreat.

Canada, Mexico and the European Union React

Canada and Mexico remain unaffected by the changes, continuing under existing USMCA provisions. In contrast, the European Union had previously proposed a “zero-for-zero” tariff reset—rejected by Trump. In retaliation, the EU slapped 25% tariffs on several American goods, including soybeans, aluminum, steel, and orange juice. Internal divisions within the EU, notably from France and Hungary, reflect the complexity of mounting a united front against U.S. policies.

Despite this, EU spokespersons noted that the tariffs could be lifted if negotiations resumed on equitable terms, suggesting room for de-escalation.

U.S.-China Trade War Intensifies

With the 125% tariff from the U.S. now in effect, China responded by announcing 84% tariffs on U.S. imports, further escalating the trade standoff. The two countries have entered a phase where bilateral trade is effectively frozen, with companies on both sides reassessing the viability of exporting to each other.

China’s central bank has reportedly instructed state banks to curb USD purchases in an effort to stabilize the yuan, which has hit its lowest level in two years. Meanwhile, the 10-year Chinese government bond yield has dropped to 1.6%, signaling deepening economic distress and an investor flight to safety.

Despite these pressures, Trump expressed a willingness to meet Chinese President Xi Jinping, signaling that diplomatic channels remain open even amid economic warfare.

Structural Realignment: The U.S. Strategy to Reshape Global Trade

Commerce Secretary Howard Lutnick confirmed the administration's intention to use the current moment to restructure global trade terms in favor of the United States. Trump’s sequence of announcements over the past two weeks—ranging from soothing reassurances to surprise tariff hikes—demonstrates a deliberate negotiation strategy meant to separate allies from adversaries.

Most countries responded by signaling interest in talks, with only a few openly siding with China. This realignment clarifies Washington’s strategy to isolate China while strengthening trade ties with nations willing to work on U.S.-led terms.

The trade offensive appears to be reshaping global supply chains, pushing multinationals to consider alternative production hubs while accelerating geopolitical fragmentation.

Broader Implications for Crypto and Alternative Assets

As the trade war unfolds, the ripple effects are reaching crypto and digital asset markets. VanEck reports increased use of Bitcoin for cross-border energy transactions in China and Russia. Bolivia and parts of Europe are exploring crypto for trade settlement, further undermining dollar dominance.

Cathie Wood’s Ark Invest added $4.8 million in Coinbase stock, anticipating growth in U.S.-based crypto firms amid regulatory clarity. Meanwhile, 21Shares launched the first Dogecoin ETP in Europe, expanding retail access to meme coins.

The White House also confirmed that crypto policy is being reevaluated. Treasury Secretary Scott Bessent stated that the U.S. will “design a regulatory framework for everyone,” including stablecoins and blockchain infrastructure.

Looking Ahead: An Opportunity in the Chaos

With trade tensions unlikely to abate soon and inflationary pressures rising, both China and the U.S. may eventually resort to monetary easing. For investors, this suggests that while short-term volatility is high, long-term capital may increasingly flow into inflation-resistant assets like Bitcoin.

The next 90 days will be critical. If successful negotiations occur, the global trade landscape could shift toward a more rules-based order aligned with U.S. standards. If not, the world may face a deeper phase of economic decoupling—with digital assets emerging as one of the few global hedges.

Disclaimer

This article is for informational purposes only and does not constitute financial or investment advice. Always consult with a professional advisor before making any investment decisions.

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