US-China Tariffs Increase Amid Trade Tensions

Tariff Escalations

Tariff escalations between the US and China have raised economic tensions. The US decision, effective June 4, 2025, increases tariffs to 50% on specific imports, notably steel and aluminum.

The US government, led by President Biden, emphasized these changes as necessary measures against perceived unfair trade practices. Janet L. Yellen, US Secretary of the Treasury, noted, “President Biden and I have made clear that we will take necessary actions to advance the interests of American workers and firms. The results of the Section 301 review announced today outline strategic and targeted steps that are needed to respond to specific long-standing unfair trade practices by the People’s Republic of China.” source

China’s State Council announced additional tariffs on US goods, raising effective rates up to 54% on certain products.

Economic Impacts

Economic analysts predict increased volatility in financial markets. Cryptocurrency markets have historically reacted to such tension with fluctuations in digital asset prices due to investor concerns.

While no significant shifts in the crypto market have been observed, previous trade wars have coincided with increased liquidity in decentralized finance protocols.

The absence of direct impacts on specific cryptocurrencies suggests caution among investors. The market remains sensitive to broader economic conditions and policy changes.

Historically, trade tensions have prompted increased stablecoin activity as investors seek security amidst volatility. Data suggest such movements could increase, affecting DeFi platforms and crypto exchanges.