What happened?
The U.S. government, under President Trump, imposed new tariffs on Chinese goods, bringing the total up to 245%. This move targets sectors that are vital for U.S. national security, such as electric vehicles and medical devices. China retaliated by placing 125% tariffs on U.S. products and restricting exports of rare earth elements crucial for technology and defense.
Who does this affect?
The tariffs impact multiple industries across both countries, including electronics, automotive, and clean energy sectors, given their reliance on rare earth materials. American consumers and businesses that rely on imported Chinese goods will likely experience increased costs. The escalating trade tensions also pose significant risks for investors, businesses, and workers in global supply chains.
Why does this matter?
These trade actions have caused uncertainty in financial markets, triggering fears of a global economic slowdown. The rising tariffs create a volatile environment for stock markets and may push more investors to seek refuge in alternative investments like Bitcoin. This uncertainty has contributed to Bitcoin trading at high levels, as it is considered a potential safe haven asset during geopolitical tensions.