The recent tariff actions taken by the United States have significantly impacted the global economic market. Today, the editor will discuss this matter in detail from multiple perspectives.
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Global Economy: Slow Growth, Rising Prices, Disrupted Supply Chains
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Economic growth is being dragged down: Trump’s tariff policy has led to a shrinkage in global trade volume. Bloomberg Economics estimates that global trade could shrink by 15%, and J.P. Morgan has raised the probability of a global recession in 2025 from 40% to 60%. The Tax Foundation predicts that the long-term decline in U.S. GDP will be 1.3%, and global economic growth may decrease from 3% to 2.5% (according to IMF estimates). Retaliatory tariffs from China, the EU, Japan, etc. (China’s additional 34% tariff on the U.S., and the EU’s proposed tariffs on $28 billion worth of U.S. goods) are intensifying downward economic pressure, pushing the global economy into a “low growth trap.”
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Intensifying inflationary pressures: Tariffs directly raise the prices of imported goods, and the average annual cost for American consumers may increase by $1,900. NPR analysis suggests that the prices of consumer goods (like iPhones) could rise by 10%-15%. If companies do not relocate production, costs will be fully passed on to consumers. Rising inflation expectations may force the Federal Reserve to potentially delay interest rate cuts or even raise rates, further suppressing economic growth.
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Financial market turbulence: Trade wars trigger risk-averse sentiment, putting pressure on global stock markets. The S&P 500 plummets, entering a technical correction zone. The Nikkei 225 experiences a circuit breaker, A-shares crash, and the cryptocurrency market declines in tandem. The dollar weakens in the short term, but interest rate hike expectations may strengthen the dollar, impacting emerging market debt.
II. Labor Market and Workers: Increased Unemployment, Stagnant Wages, Skill Mismatch
- United States: Net job losses and wage stagnation
The Tax Foundation estimates that Trump’s tariffs, including Sections 301 and 232 under the Biden era, will result in the loss of 142,000 full-time jobs in the United States. The manufacturing sector has benefited in the short term (e.g., a small increase in the steel industry), but downstream industries (e.g., steel-intensive manufacturing) have laid off more workers due to rising costs. Wage growth has been limited, as the real purchasing power of workers has declined as the ratio of capital stock to labor has fallen in tandem.
- China: Export-oriented industry unemployment crisis
China’s export competitiveness to the US has been hindered by a 54% tariff, leading to increased layoffs in export-oriented industries such as textiles and electronics. User @fuxianyi pointed out that the reduction in China’s trade surplus (due to obstacles in re-export trade) could trigger a “severe unemployment crisis.” The mismatch between workers’ skills and domestic demand industries makes re-employment difficult, putting pressure on the social security system.
- North American Neighbors: Employment Shock and Labor Shortage
The Mexican automotive industry (accounting for 5% of GDP) faces a 25% tariff, threatening 1 million jobs. Canada relies on the U.S. for 70% of its exports, with agricultural and energy workers facing setbacks and increased layoff risks. RBC Thought Leadership points out that the aging of North American manufacturing workers (26% over 55 years old) and a decrease in immigration have led to a constrained labor supply, making it difficult to fill new positions.
- Global: Decline in labor productivity
PMC research shows that the tariff war will lead to a decrease in resource allocation efficiency, with labor productivity expected to decline by 0.9% in five years. Developing countries (such as Vietnam and India) will face export restrictions, resulting in a slowdown in employment growth and a decrease in workers’ income.
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Consumers: Rising cost of living, reduced consumption choices
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American Consumers: Tariffs are driving up prices for imported goods, with NPR estimating that electronic products like the iPhone could see price increases of 10%-15%. Data from the Tax Foundation shows that American households are spending an additional $1,900 per year, leading to a rise in the cost of living. Consumers are forced to cut back on non-essential spending (such as electronics and clothing) or turn to lower-quality alternatives, resulting in a decline in consumer confidence (similar to the 10-point drop in CCI in 2018).
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Chinese Consumers: China has imposed a 34% tariff on imports from the U.S., leading to a rise in prices of U.S. goods (such as beef and wine), which has resulted in consumers reducing their purchases. Although the depreciation of the RMB has alleviated some costs, prices for imported reliant products (such as high-end chips) are still rising, impacting middle-class consumption.
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Global Consumers: Consumers in the EU and Japan are also affected, with Japan’s 24% tariff leading to increased prices for imported cars (such as Toyota), and the EU’s 20% tariff driving up prices for American goods (like bourbon whiskey). Consumer purchasing power is declining, leading to a contraction in the global consumer market.
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Enterprises and Supply Chains: Rising Costs and Reconstruction Challenges
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Increased corporate costs
American companies (such as Apple and Walmart) are compressing profits or raising prices due to rising raw material costs (semiconductors, consumer goods). Some institutions point out that U.S. imports will decrease by 25% (about $800 billion), and corporate profit expectations are worsening.
- The cost of reconstructing the supply chain is high.
The North American supply chain is highly integrated, and exports of parts from Mexico and Canada to the U.S. are obstructed, leading to a decrease in automotive production efficiency. Companies are forced to restructure their supply chains (for instance, Apple is considering production in Vietnam), but the cost of establishing new factories is high (restructuring the supply chain takes several years, with initial costs rising). Chinese companies are turning to the EU and Vietnam; although trade shares are increasing, they cannot fully compensate for losses in the U.S. market.
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Geopolitics and Long-term Effects: Economic Fragmentation and the Challenges of Reshoring Manufacturing
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Reshaping of the geopolitical landscape
The trade war intensifies the confrontation between China and the United States, with the European Union suspending investments in the U.S. (as stated by Macron), leading to an increase in global economic fragmentation. Countries are devaluing their currencies to offset the impact of tariffs, resulting in increased volatility in the financial markets.
- It’s difficult to achieve the return of manufacturing.
Trump intends to promote the return of manufacturing through tariffs, but the effect is limited. Labor costs in the U.S. are high, and there is a shortage of skilled workers (the manufacturing workforce is aging significantly). The Tax Foundation points out that the steel and aluminum tariffs during his first term did not increase production, and the return of the footwear and apparel industries is even more hopeless (production has completely shifted overseas).
- Current tariff policies of various countries: Everyone is standing firm.
United States: Trump implemented a 10% global tariff and reciprocal tariffs, with China at 54%, Japan at 24%, the EU at 20%, India at 26%, South Korea at 25%, and Taiwan at 32%. Canada and Mexico are at 25%, but goods compliant with USMCA are temporarily exempt. Additional tariffs of 25%-100% have been imposed on automobiles, semiconductors, and pharmaceuticals, clearly aiming to protect domestic industries.
China: Unwilling to back down, imposed a 34% tariff on American goods, affecting agricultural products and technology companies, and also put 11 American tech companies on the export control list, clearly indicating a tough stance.
EU: Imposing tariffs on $28 billion worth of goods from the US, retaliating in two phases. The first wave will start in mid-April, targeting Bourbon whiskey and motorcycles among others. There are also plans to impose a 200% tariff on American alcoholic beverages, with France and Germany directly calling for a halt to investments in the US.
Japan: Stunned by a 24% tariff, has temporarily not raised taxes, but is beginning to reduce its dependence on American agricultural products and is preparing to stimulate its own economy.
Canada: Imposing a 25% tariff on American cars until the U.S. lifts tariffs on the Canadian auto industry, clearly indicating a hardline approach, while also negotiating for exemptions under the USMCA framework.
VII. Conclusion: The world has been severely impacted, how can people in the crypto space recover their losses?
The trade war triggered by U.S. tariffs has severely impacted the globe: economic slowdown, high inflation, turmoil in the labor market, rising consumer costs, supply chain disruptions, geopolitical tensions…
The fragmentation of the global economy is intensifying, and markets such as US stocks, A-shares, Japanese stocks, European stocks, and the cryptocurrency sector are no exception. Retail investors are facing a dilemma: they are afraid of being trapped if they buy the dip, and worried about missing out if they stay in cash. Manual trading makes it easy to chase rallies and cut losses, so it’s better to let “AI Grid” help you automatically buy low and sell high!
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(1) Why use AI grids now?
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Zero-cost entry: Completely free to use, small funds can participate, and there is no upper limit for large funds to run in parallel.
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Unstable market after a sharp decline: BTC may test the bottom again or may fluctuate to recover. The trend is hard to discern, but grid trading does not rely on direction and only profits from volatility.
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Avoid emotional trading: Human nature is driven by fear and greed, often leading to the situation where “buying leads to a drop, and selling leads to a rise,” while AI strictly follows strategies, buying low and selling high.
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Protecting assets during a decline: The grid will buy more as it falls, lowering the cost, and rebound faster to break even or even make a profit.
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Assuming the current BTC price is 79,815, the short-term prediction is that it will fluctuate within the range of 74,000−81,000.
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Set grid: 74,000−81,000
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Number of grids: 7 grids, arithmetic (the difference in pending orders is 1000)
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Scenario Simulation:
BTC has dropped to 74,000: the program will place buy orders in batches at 79k/78k/77k/76k/75k/74k, with an average price of 76.5k.
BTC bounced from 74,000 to 76,900: the program automatically sells positions at 74k/75k/76k to realize partial profits, while still holding positions at 77k/78k/79k, waiting for further increases. If there is another pullback later, the buying and selling will continue to be executed in a loop.
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Nanny-level tutorial:
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