Euro Surges Against The Dollar Amid Tariff Turbulence

Economic

Forex

Summary:

Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

The euro has emerged as a surprising victor in recent market fluctuations, reaching a three-year high against the US dollar as global investors grow increasingly nervous about holding American assets. This remarkable turnaround comes in the wake of President Donald Trump’s new tariff policies, which have triggered significant market turbulence and caused a substantial shift in global investment flows. The euro’s strength has confounded earlier market consensus, which had predicted the currency would weaken below $1 if tariffs were imposed. Instead, the single currency has gained more than 5% against the dollar since April 1, the day before Trump introduced new 10% baseline tariffs on all economies and additional 20% duties specifically targeting the European Union. The currency’s rally has accelerated following Trump’s decision to pause the higher levies for 90 days, fueling the biggest single-day jump in the euro since 2015.

Euro Emerges as a Winner Amid Traffic Woes

As of 11:13 AM EST on April 11, 2025, the EUR/USD exchange rate stood at 1.1380, representing a daily gain of 1.08%. This follows an even more impressive 2.80% surge on April 10, when the rate closed at 1.1258. The currency pair reached as high as 1.1473 during April 11 trading, marking a substantial rise from its recent low of 1.0732 recorded on March 27, 2025. Over this period, the euro has experienced a remarkable 5.06% jump, with the most dramatic movement occurring between April 9-10 when the euro decisively broke above the psychologically important 1.10 level. This upward momentum builds on gains that started weeks earlier following Germany’s announcement of a massive spending plan, creating a perfect storm of factors supporting the single currency.

Euro’s Turnaround Reflects Significant Shift in Global Capital Flow

The primary driver behind the euro’s unexpected strength is a significant shift in global capital flows. European investors are selling their US assets and bringing money home, with the euro area accounting for the largest share of foreign ownership of US assets by currency. This repatriation pattern is particularly potent given that foreign holdings of US assets had ballooned to $62 trillion in 2024 from just $13 trillion a decade earlier. Unlike traditional safe havens such as the Japanese yen and Swiss franc, the euro typically weakens against the dollar during periods of market stress, making its current performance all the more remarkable. The gap between German and US 10-year bond yields has widened substantially, suggesting growing investor nervousness about US debt. According to ECB policymaker Francois Villeroy de Galhau, Trump’s policies have eroded confidence in the dollar, while some analysts now project the euro could potentially rally to $1.25 if current trends continue.

Euro’s Appreciation Carries Mixed Implications for the European Economy

The euro’s appreciation carries mixed implications for the European economy. On the positive side, increased demand for euro-denominated debt could make it easier for European governments to fund spending initiatives. The stronger euro also provides the European Central Bank with more flexibility to maintain lower interest rates even if tariffs cause inflation to rise. However, analysts warn that becoming a currency of choice could ultimately hurt European exporters who have traditionally benefited from a weaker euro during global economic slowdowns. This concern is particularly relevant as the euro’s strength has been broad-based, hitting a 17-month high versus Britain’s pound and trading around 11-year highs against China’s yuan, pushing it to a record level on a trade-weighted basis. As markets continue to adjust to the new tariff landscape, European policymakers will need to carefully balance these competing economic forces.

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Source: CryptoSlate

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Warren Takunda

Cryptocurrency

Bitcoin (BTC) price bounced quickly from its five-month low of $74,300 to reach $83,565 on April 9, but the rejection from the $83,500 level raises questions about whether BTC will be able to hold the $80,000 zone. Is Bitcoin Price Going to Crash Again?_1

Is Bitcoin Price Going to Crash Again?_1

BTC/USD daily chart. Source: Cointelegraph/TradingView

Will Trump’s 90-day tariff pause create a BTC trend reversal?

On April 9, US President Donald Trump authorized a 90-day pause on proposed tariff hikes while introducing a blanket 10% reciprocal tariff on all countries except China. In contrast to his broader olive branch, Trump doubled down on his trade war with China, escalating tariffs on Chinese imports to the US to 125%, citing Beijing's lack of "respect for world markets."

This move triggered a historic market rally, with Bitcoin surging over 7% to $82,000 as investor nerves eased. The pause offers temporary relief, reducing immediate trade war fears that had previously tanked risk assets.

However, China’s retaliatory 84% tariffs on US imports, effective April 10, signal an escalating standoff. If negotiations fail and the US-China trade war deepens after the 90-day window, Bitcoin could face renewed downward pressure as markets recoil from heightened uncertainty.

“With China singled out so explicitly, market participants are bracing for Beijing's counterpunch,” trading firm QCP Capital wrote in a Telegram note to investors.

QCP Capital added:

“Should retaliation materialize in force, the exuberant rally could quickly morph into a classic bull trap.”

While the pause buys time, its ability to prevent a crash hinges on whether Trump can de-escalate tensions with China—a tall order, given his aggressive rhetoric.

Inflationary pressures could weigh down BTC price

Another factor adding to Bitcoin price headwinds is macroeconomic factors like inflation fears and potential recessions.

Bitcoin has increasingly correlated with tech stocks and broader market sentiment, as seen in its sharp declines during periods of market turmoil. For instance, when Trump’s initial tariff announcements triggered a sell-off in equities, Bitcoin dropped nearly 10% from its highs earlier this year, slipping below $80,000.

Analysts argue that if trade tensions escalate further or central banks tighten monetary policy to combat inflation, investors may flee risk assets like Bitcoin, pushing its price lower.

This sensitivity to macroeconomic shifts suggests that any sudden economic shock—like a Federal Reserve rate hike or a global growth slowdown—could spark another crash, especially if Bitcoin fails to break its current trading range of $80,000-$90,000.

Market participants now shift their focus on the April 10 CPI data, which is poised to refocus attention on the domestic economy.

“A weaker print would be welcome,” QCP capital said, adding that it would help to “offset the inflationary overhang introduced by the blanket tariff policy.”

Lowering interest rates is unlikely before June, despite one Fed meeting scheduled in the interim, according to CME Group’s FedWatch Tool. Is Bitcoin Price Going to Crash Again?_2

Is Bitcoin Price Going to Crash Again?_2

Fed target rate probabilities for the May 7 FOMC meeting. Source: CME Group

The odds of the Fed keeping interest rates unchanged at the May 7 meeting are 81.5%.

This could further dampen enthusiasm for BTC and push its price lower if key price levels do not hold.

Key Bitcoin levels to watch

Bitcoin breached the $75,000 level on April 8 before retracing to the current levels. Traders are now focused on key areas around this level and the $109,000 peak, which the BTC price might revisit in the near future.

From a technical perspective, key Bitcoin levels to watch are the 111-day moving average (MA) at $93,000, the 200-day MA at $87,000 and the 365-day MA at $76,000, according to market intelligence firm Glassnode.

In its latest Week's On-chain report from Glassnode highlights that after losing the 111-day MA and the 200-day MA in the recent drawdowns, the price must now hold above the 365-day MA to avoid another crash.

“This is a key momentum level that has thus far held as support but needs to remain as support to avoid further downside momentum from being established.” Is Bitcoin Price Going to Crash Again?_3

Is Bitcoin Price Going to Crash Again?_3

Bitcoin: Technical levels to watch. Source: Glassnode

Another level to watch, according to Glassnode, is the short-term holder (STH) cost basis at $93,000 (coinciding with the 111-day MA), which, if reclaimed, would signal the first sign of strengthening momentum.

However, if Bitcoin fails to hold above $80,000, it will embark on another downward path. Key levels to watch below the 365-day EMA are the active realized price at $71,000 and, in dire cases, the true market mean of around $65,000.

“We now have confluence across several onchain price models, highlighting the $65k to $71k price range as a critical area of interest for the bulls to establish long-term support” Is Bitcoin Price Going to Crash Again?_4

Is Bitcoin Price Going to Crash Again?_4

Bitcoin: True market mean. Source: Glassnode

As earlier reported by Cointelegraph, Bitcoin risks another sweep of the five-month lows at $71,000 if the tariff wars and stock market tumult continue.

Source: Cointelegraph

Risk Warnings and Disclaimers

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Glendon

Economic

Cryptocurrency

Recently, global markets were left stunned by the dramatic swings in U.S. stocks. After plunging sharply on news of “reciprocal tariffs,” the market reversed course and surged when the White House announced a 90-day suspension of tariffs on certain countries. The Dow Jones Industrial Average soared more than 2,900 points, a 7.87% gain — its biggest one-day jump since March 25, 2020. The S&P 500 rallied 9.52%, marking its largest gain since October 29, 2008, while the Nasdaq spiked 12.16%, notching the second-largest single-day gain in its history.

The “Magnificent Seven” tech giants all soared, with their combined market cap increasing by a staggering $1.85 trillion in just a matter of hours.

This kind of rhythm must feel all too familiar. That’s right — it’s the same kind of price action we often see in altcoins. Many market analysts couldn’t help but exclaim: “U.S. stocks are swinging like altcoins. The world is one giant pump-and-dump.”

Yet the surprises from the U.S. didn’t stop there. The March CPI data came in way below expectations: year-on-year growth was just 2.4%, missing forecasts, and the month-on-month figure even dropped by 0.1%. Core CPI was equally disappointing, hitting a four-year low. The unadjusted year-over-year core CPI for March came in at 2.8%, declining for the second straight month and marking the lowest level since March 2021 — falling short of the 3.0% market forecast.

These two sets of data not only defied market expectations but also prompted investors to reassess the Federal Reserve’s policy outlook. The market’s response was swift:

Spot gold initially spiked $6 before pulling back;
The U.S. Dollar Index slipped 20 points in the short term;
GBP/USD extended its intraday gains to 1.00%.

In the face of such data, a significant number of market analysts now believe a Fed rate cut in June is all but certain.

Harriet Torry, an economist at The Wall Street Journal, noted that under normal circumstances, a slowdown in year-over-year CPI growth would be considered welcome news.

Naturally, this also bodes well for the crypto market. As the Fed’s benchmark interest rate retreats, the crypto space could see a fresh wave of value re-evaluation.

The Relative Pricing Effect of Lower Risk-Free Rates

The yield on the U.S. 10-year Treasury note has fallen from its 2023 peak of 4.8% to 4.28% (with a recent low of 4.18% before rebounding by 10 basis points in the past few days). Shrinking returns on traditional fixed-income assets have pushed capital toward higher-risk assets. Take Bitcoin as an example — its correlation with Treasury yields was as low as -0.73 in 2023. The opportunity cost of holding crypto assets drops significantly in a rate-cut cycle, thereby increasing their appeal. According to Goldman Sachs models, every 25 basis point rate cut could push Bitcoin’s market cap up by 6–8%.

Reinforced “Digital Gold” Narrative

Bitcoin’s 90-day correlation with gold rose from 0.12 in 2023 to 0.35, peaking at 0.68 during the Silicon Valley Bank crisis. When rate cuts coincide with rising recession risks, the safe-haven value of crypto assets may be re-evaluated. A report by Grayscale points out that a 1% drop in real interest rates could raise Bitcoin’s valuation baseline by 15%.

Liquidity Injection from Rate Cuts

Historically, Fed rate-cutting cycles are often accompanied by broad-based asset price increases. As liquidity eases and capital costs decline, investor appetite for risk assets grows — this is especially pronounced in the crypto market.

As high-volatility and high-risk instruments, crypto assets are highly sensitive to liquidity shifts. When the Fed signals monetary easing, idle capital tends to chase higher returns, and crypto assets — with their strong return potential — quickly become a focus.

The Economic Case for Deflationary Tokens

Against expectations of fiat currency debasement, the scarcity premium of fixed-supply cryptocurrencies becomes increasingly prominent. This built-in deflationary feature adds anti-inflation appeal during a rate-cut cycle.

Catalysts for Institutional Adoption

Rate Cuts Amplify the “Asset Shortage” Phenomenon

Lower interest rates reduce yields in traditional financial markets (e.g., bonds, money market funds), creating reallocation pressure for institutions. Long-term investors like insurers, pension funds, and family offices may divert part of their capital toward growth-oriented emerging markets.

With regulatory infrastructure — such as ETFs, custody, and auditing — steadily maturing, crypto assets are becoming increasingly viable for compliant investment. As rate cuts lead to muted returns in traditional markets, institutions are likely to include Bitcoin and Ethereum in diversified portfolios.

Crypto ETFs in Sync with the Rate-Cut Cycle

By the end of 2024, several spot Bitcoin ETFs were approved for listing in the U.S., marking a pivotal moment for institutional money to enter the crypto space openly. If rate cuts coincide with the ETF boom, we could see a dual momentum of institutional inflows and macro liquidity expansion — further amplifying the crypto market’s upside potential.

On-Chain Activity Revival Across the Crypto Ecosystem

DeFi Market Reawakens

During the rate-hiking cycle, DeFi platforms struggled to compete with low-risk returns from U.S. Treasuries, leading to a decline in TVL (total value locked). As risk-free yields fall, DeFi returns become more attractive again, drawing capital back in.

Leading protocols like Compound, Aave, and Lido are already showing signs of TVL recovery. As on-chain lending rates stabilize and stablecoin interest spreads widen, capital efficiency improves — enhancing liquidity across the DeFi ecosystem.

NFT and GameFi Markets See Renewed Interest

Rate cuts free up capital, reviving user enthusiasm for high-volatility, high-engagement assets like NFTs and GameFi tokens. Historically, NFT market activity has lagged behind Bitcoin rallies and typically explodes in the second phase of a bull market. Fed rate cuts may open new upside potential for these application-layer assets.

Conclusion

In sum, Fed rate cuts are laying the macro foundation for a new crypto market upcycle. From liquidity injection and capital reallocation to institutional entry, on-chain activity, and financing environments — rate cuts present systematic tailwinds for the crypto sector.

As the Fed opens the liquidity floodgates, crypto assets are evolving from speculative fringe assets into mainstream macro allocation tools. This transformation is being driven by both traditional financial giants and breakthroughs in underlying technology — alongside intense market cleansing and value reconfiguration.

Of course, the market won’t turn overnight. Regulatory clarity, tech infrastructure, and security challenges still need to be addressed. But under the dual engine of “monetary easing + asset innovation,” the crypto market could be poised for a new structural rally in the coming year. For investors and builders alike, understanding the policy cycle and market tempo will be key to navigating both bull and bear.

Source: CryptoSlate

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Warren Takunda

Economic

Global stocks fell on Friday and the dollar slid after a brutal week marked by the eruption of an all-out trade war and a bond market selloff that has ignited fears of recession and shaken confidence in U.S. assets.

The dollar slid to its lowest in 10 years against the Swiss franc and a six-month low against the yen as investors sought other safe haven assets. The euro surged 1.7% to $1.13855, a level last seen in February 2022 and gold, seen as a safe asset during times of crisis, hit another record high.

Investors are grappling with worries over the escalating Sino-U.S. trade war after U.S. President Donald Trump ratcheted up tariffs on Chinese imports, raising them effectively to 145%.

China has hit back, hiking its tariffs on the U.S. with each Trump increase, raising fears that Beijing may jack up duties above the current 84%.

The selloff in U.S. Treasuries picked up pace during Asian hours, with the 10-year note yield rising to 4.45%, gaining about 45 basis points in the week, the biggest increase since 2001, LSEG data showed.

"There's clearly an exodus from U.S. assets. A falling currency and bond market is never a good sign," said Kyle Rodda, senior financial markets analyst at Capital.com. "This goes beyond pricing in a growth slowdown and trade uncertainty."

In Europe, stocks pared early gains, leaving the STOXX 600 down nearly 1% on the day and set for a 1.7% drop this week, one of its most volatile on record.

In Asia, Japan's Nikkei tumbled 4.3% on the day, while stocks in South Korea fell nearly 1%.

U.S. Treasury Secretary Scott Bessent tried to assuage sceptics by telling a cabinet meeting on Thursday that more than 75 countries wanted to start trade negotiations. Trump himself expressed hope of a deal with China, the world's No.2 economy.

But James Athey, fixed income manager at Marlborough, said the outlook remains clouded in more uncertainty than it did a month ago. "There are still so many unanswered and unanswerable questions."

U.S. futures for the S&P 500 and Nasdaq were mostly flat on the day, but trading was highly erratic, with both having traded down as much as 2% earlier before rallying as much as 1.6%.

The anxiety about tariffs has sparked a renewed rush into safe havens, after a brief but massive relief rally following Trump's move on Wednesday to temporarily lower tariffs on many countries.

"The short-term outlook for global risk assets remains uncertain given growth and inflation concerns, fluid sentiments and fast-changing developments on the trade and tariff fronts," said Vasu Menon, managing director of investment strategy at OCBC Bank in Singapore.

RECESSION FEARS

A violent U.S. Treasury selloff this week, evoking the COVID-era "dash for cash", has reignited fears of fragility in the world's biggest bond market.

Thirty-year bond yields rose to 4.90%, on course for their biggest weekly jump since at least 1982, LSEG data showed.

"What we are seeing in U.S. bond markets is not currently about inflation concerns," said Michael Krautzberger, Global CIO Fixed Income at Allianz Global Investors.

Krautzberger said the price action in Treasuries could be reflecting investor fears that a sharp growth slowdown, or recession, "makes an already unsustainable U.S. fiscal outlook even worse."

"On the other hand, we could just be witnessing a rebalancing among institutional investors or a deleveraging from levered funds."

In commodities, gold hit another record high, rising 1.1% to $3,210 an ounce.

Oil prices rose on Friday, but still headed for a second straight week in the red on concerns about a prolonged trade war between the United States and China. Brent crude futures were last up 1% at $63.97 a barrel.

Source: Reuters

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Glendon

Forex

Economic

Van november 2022 tot november 2024 zat de EUR/USD-combinatie ‘geblokkeerd’ tussen 1.0450 en 1.1275. Enter Trump. Aanvankelijk voelde een meerderheid in de markt zich aangesproken door de MAGA-retoriek. Even zag het er naar uit dat EUR/USD helemaal door het ijs zou zakken. De VS had alle troeven: economisch en geopolitiek. Europa was een reus op lemen voeten die door Trump op zowat alle terreinen onderuit kon worden gehaald. (Externe) overschotten waren een nadeel, geen voordeel zo bleek.

Fast forward naar het tijdperk van wederkerige invoertarieven. In twee maanden tijd werd de vermelde handelsband bij het grof huisvuil gezet. Van EUR/USD 1.0140 begin februari schrijven we nu 1.14!. De Trump administratie wil op zich waarschijnlijk wel een zwakkere dollar. Het handelstekort weet je wel. Toch stond het huidige marktscenario waarschijnlijk niet in het plan (als er al een echt plan is natuurlijk). De EUR/USD-opsprong begon in maart als een Europese reflatietrade. Het besef van een te grote afhankelijkheid van de VS duwde Europa/Duitsland weg van fiscale orthodoxie naar investeringen in (militaire) ‘onafhankelijkheid’. Europese rentes, beurzen en de euro veerden op. Midden maart bereikte EUR/USD 1.095. De markt vertrouwde in de (groei)kracht van die Europese tekort-bestedingen, en alvast veel meer dan in het Amerikaanse economisch (tarief)beleid en de dogmatische keuze van niet gefinancierde belastingverminderingen.

Sinds “Liberation Day” zette EUR/USD een nieuwe forse stap hoger van 1.085 tot 1.14. Zonder meer een motie van wantrouwen in de dollar. Trump zette woensdag zijn joker/Trump put in om de ‘Sell America’ trade af te blokken. Niet zozeer om de beursdaling of de USD-daling af te remmen. Wel omdat het anker van het ‘American exceptionalism’ loskomt. Investeerders verliezen het vertrouwen in lange termijn Amerikaanse overheidsobligaties (en dus in de dollar). Hierbij viel gisteren op dat de hernieuwde verkoopdruk in lange Amerikaanse obligaties hand in hand ging met een stijging van Duitse Bunds. De weg is nog lang, maar de markt is op zoek naar een nieuwe veilige haven in het obligatie-universum, weg van de VS.

Waar eindigt dit? Hier nog niet. Zelfs het (volledig) terugdraaien van de handelstarieven is onvoldoende om het vertrouwen te herstellen. Er is ook nog de torenhoge Amerikaanse schuld. Hoe groot is de kans dat Trump fiscaal de tering naar de nering zet en onrealistische belastingverminderingen afblaast? Kort samengevat, de geloofwaardigheid van schuldpapier en de dollar zijn twee kanten van dezelfde medaille. Zolang de rust voor de eerste niet terugkeert, blijft de tweede onder druk staan.

De Fed is hier waarschijnlijk geen deus-ex-machina. Het volstaat deze keer niet om USD liquiditeit in de markt te duwen. De Fed obligaties kopen en daarmee het signaal bevestigen dat de markt alle vertrouwen verloren heeft? Niet evident. Ook aan de andere kant van de USD-vergelijking is hulp niet zo evident. Bij een te snelle daling van USD/JPY wilde de BoJ al wel eens ingrijpen om de te sterke yen af te remmen. Dat is nu niet aan de orde. Uiteraard kan Japan (of een ander land) dit niet oplossen. Bovendien. Wat ga je als CB doen met die USD doen? Beleggen in ‘veilige’ Treasuries? Over China zwijgen we hier sowieso. We zijn ons bewust van de simplistische short-cuts. De boodschap blijft dat de dollar in vrije val dreigt terecht te komen en dat er weinig conventionele mechanismen zijn om dit te stoppen. De technische grafiek zegt dat er nog een kleine weerstand ligt nabij 1.17 alvorens EUR/USD terugkeert richting de top van begin 2021 (1.2344).

Einde Van Een USD-tijdperk?_1

Source: KBC Bank

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Michelle

Economic

Stocks

As the U.S. braces for the onset of the first-quarter earnings season, the S&P 500 faces its next pivotal moment against the backdrop of a looming trade war and economic uncertainty.

The latest forecasts suggest that S&P 500 earnings will have grown 7.0% year-on-year for the quarter ending March, as per FactSet data.

Source: FactSet

However, the optimism of these figures is tempered by the cloud of tariffs and their potential impact on corporate outlooks. Notably, companies with significant international exposure may face greater challenges, as tariffs can directly affect their supply chains and profit margins.

Corporate America Braces for Tariff Impact

The earnings season kicks off with major financial institutions set to release their reports. JPMorgan Chase (NYSE:JPM) and Wells Fargo (NYSE:WFC) are scheduled to announce their Q1 earnings on April 11.

The banking sector, often among the first to feel the tremors of economic shifts, will provide an early indicator of how companies are navigating the current challenges. Investors will be listening closely, knowing that any hint of pessimism could ripple across the broader market.

Beyond the banking sector, investors are keenly observing developments across various industries to gauge the impact of tariffs and trade negotiations on corporate performance and growth projections.

Next week sees high-profile names like Netflix (NASDAQ:NFLX), Johnson & Johnson (NYSE:JNJ), United Airlines (NASDAQ:UAL), UnitedHealth (NYSE:UNH), Taiwan Semiconductor (NYSE:TSM), and ASML (NASDAQ:ASML) report earnings.

Tesla (NASDAQ:TSLA), Boeing (NYSE:BA), AT&T (NYSE:T), Verizon (NYSE:VZ), GE Aerospace (NYSE:GE), Intel (NASDAQ:INTC), IBM (NYSE:IBM), American Airlines (NASDAQ:AAL), Caterpillar (NYSE:CAT), are then due the following week.

The earnings season gathers momentum in the last week of April when the mega-cap tech companies, including Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), Meta Platforms (NASDAQ:META), Amazon (NASDAQ:AMZN), and Apple (NASDAQ:AAPL) are all scheduled to release their quarterly updates.

From technology to manufacturing, each sector has its unique vulnerabilities to trade disruptions, and the upcoming earnings season will be a telling indicator of how these companies are adapting and forecasting future demand.

Focus on Forward Guidance

Beyond the reported earnings figures, investors are particularly interested in the forward guidance provided by companies for insights into how tariffs and economic uncertainties are impacting future outlooks. A dour forecast from a bellwether firm could amplify fears that the economy is losing steam.

Tariffs were mentioned over 800 times in investor events and calls during Q4 - the highest number in 15 years and double the mentions during Trump’s 2018-2019 trade war. Management commentary on future earnings prospects, capital expenditures, and strategies to mitigate tariff impacts will be crucial in assessing the resilience of businesses.

Companies that demonstrate adaptability and provide clear strategies for navigating the current trade environment may instill greater confidence among investors.

Source: Investing

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Winkelmann

Political

Economic

China on Friday struck back at President Trump's ballooning tariffs, raising its duties on imports of US goods to 125% from 84%.

The countermeasures will come in on Saturday, further intensifying a US-China trade war that has roiled US stocks. The trade conflict has weighed on investor sentiment, even as Trump instituted a 90-day pause on steep Liberation Day tariffs and the EU matched a US pause on retaliatory duties.

The White House clarified on Thursday that US tariffs on Chinese imports are now at least 145%, not the 125% that Trump had said previously.

Trump and members of his Cabinet attempted to reassure investors that things would "work out" with China. Treasury Secretary Scott Bessent said he was confident the US would be in a place of "great certainty" after the "pause" as the administration looks to negotiate new trade deals with partners.

China announced Friday it will hike tariffs on US goods to 125%, up from the previously planned 84%, in direct response to President Trump’s reciprocal tariff moves. Beijing hinted it would draw a line under further tariff hikes — even if Washington continues its escalations.

The Ministry of Finance of the People's Republic of China (MOF) said: “The US alternately raising abnormally high tariffs on China has become a numbers game, which has no practical economic significance, and will become a joke in the history of the world economy,” a Commerce Ministry spokesman said in a statement announcing the countermeasure.

"At current tariff levels, US exports to China are no longer commercially viable. If Washington continues its ‘tariff number game’, Beijing will ignore it. But should the US persist in inflicting real harm on China’s interests, China will respond forcefully and without hesitation," the MOF added.

This move represents another intensification in the US-China trade war, raising concerns about a significant global economic downturn. Following President Trump’s announcement last week of broad "reciprocal" tariffs on all US trading partners, China has been the most affected, with both countries escalating their tariff measures in retaliation.President Trump's trade war is now clearly focused on one country: China.

China Hits Back, Hikes Tariffs on US Goods to 125% From 84%_1

This became evident when the president put a pause on his plans for additional "reciprocal" tariffs — with the exception of those targeting China, the world's second-largest economy.

On Thursday, the White House clarified that the total base tariff on China is actually 145%, surpassing the 125% initially reported and the figure Trump had hinted at on social media.

This updated figure was revealed when the text of Trump's executive order to "modify reciprocal tariff rates" was released to the media on Thursday morning.

And now, China has hit back, increasing tariffs on US goods to 125%, escalating the ongoing trade war between the two nations.