Trump Tariffs Ignite Market Jitters: Bitcoin Weakens, Yuan Drops, and Asia Equities Reel

Trade Tensions Escalate as Trump’s Tariffs Rattle Global Markets, Bitcoin Approaches Key Technical Breakdown

Markets across Asia sold off sharply Thursday as investors assessed the potential fallout from U.S. President Donald Trump’s aggressive new tariff regime, with uncertainty around China’s response casting a long shadow over risk assets globally.

At a press conference in Washington, Trump unveiled a sweeping tariff initiative that includes a 54% total levy on Chinese imports—up from the previous 20%—as well as new taxes on goods from over 180 countries. Canada and Mexico were notably excluded.

The surprise escalation triggered immediate moves in global markets. The yuan weakened to a seven-week low of 7 per dollar, signaling growing pressure on Beijing to respond. “China may resort to currency devaluation to offset the impact,” said Robin Brooks of the Institute of International Finance, noting the potential for global contagion if such a step is taken.

Equity markets across Asia were deep in the red, with Japan’s Nikkei falling to its lowest since August. U.S. stock futures also slumped, with Nasdaq futures off 2.3% and S&P 500 futures down 1.7%, as risk sentiment deteriorated.

Bitcoin (BTC), often seen as an uncorrelated asset, declined in tandem with traditional markets, dropping from $88,000 to a session low near $82,500. It was last seen hovering at $83,300. The move comes as BTC flirts with a potential “death cross,” where its 50-day moving average dips below the 200-day — a pattern that has historically signaled downside momentum.

Options markets show growing demand for downside protection, with traders favoring puts expiring in June, according to data from Deribit and Amberdata. Market watchers warn that if China retaliates in kind, risk-off positioning could intensify across both crypto and traditional markets.

For now, attention turns squarely to Beijing. A muted response may calm markets, but a forceful one could open a new chapter in the global trade war — with digital assets increasingly caught in the crossfire.

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