Trump’s Liberation Day Explained: What New Tariffs Mean for Crypto

YEREVAN (CoinChapter.com) — Donald Trump named April 2 as “Liberation Day.” On this date, the U.S. will start a new round of tariffs. These trade actions are part of Trump’s effort to reset U.S. relations with multiple countries. Though not all tariff details are public, several sectors are expected to face higher import taxes.

The announcement comes after Trump delayed earlier tariffs. He confirmed this final date in a public speech. Speaking at a recent press briefing, Trump said,

“We have Liberation Day, as you know, on April 2… many countries have taken advantage of us… for many, many decades. And you know, that has to stop.”

The tariffs are expected to affect a wide range of goods, including vehicles, semiconductors, pharmaceuticals, and copper. Tariffs may also apply to nations trading oil with Venezuela and to imports from China, Mexico, and Canada.

Trump’s Trade Policy Timeline and Background

Trump has supported tariffs since the 1980s. In a 1987 interview with Larry King, he criticized free trade and said other countries were “ripping off the United States.” His first presidential term began with tariffs against China. These were based on concerns over intellectual property and trade practices.

In January 2025, Trump signed an executive order preparing new tariffs. On February 4, he announced the first round. These included a 10% tax on all Chinese imports and 25% tariffs on goods from Canada and Mexico. Following negotiations, tariffs on Canada and Mexico were delayed. Still, the rest are now moving forward under the Liberation Day plan.

Crypto Markets React Before the Tariffs Start

Liberation Day arrives as global liquidity tightens and inflation expectations increase. The Federal Reserve raised its 2025 core inflation forecast to 2.8%, up from 2.5%, during its March policy meeting. Officials cited the likely impact of higher import costs due to Trump’s new tariffs.

Rising trade costs often lead to higher prices for businesses and consumers. As the U.S. imports more than it exports, the impact on consumer goods is immediate. When prices climb, spending slows. This affects firms dependent on cheap components, narrowing their profit margins and reducing investor confidence.

The heatmap from March 31, 2025, shows a sharp decline across major equities and digital assets. Bitcoin dropped 3.04%, while Ethereum lost 8.07%. XRP saw a steeper fall at 13.01%. Other top tokens like Solana and BNB were down 4.46% and 3.03%, respectively.

Traditional tech and retail also reacted. NVIDIA (NVDA) plummeted 12.14%, while Google (GOOGL) lost 8.14%. Amazon (AMZN) dropped 6.34%, and Microsoft (MSFT) fell 6.22%. The move away from high-risk sectors was broad.

 Stablecoins like Tether (USDT) and USDC stayed flat at -0.00% and +0.01%. Some energy stocks, such as ExxonMobil (XOM) and Chevron (CVX), posted small gains, reflecting a shift toward defensive positions.

Gold markets, on the other hand, saw a surge. Gold futures climbed as investors moved to safer assets. Market data showed that both stocks and crypto faced pressure, while gold rose. This behavior is consistent with rising fears about a global trade conflict.

The total crypto market cap decreased. Market heatmaps from TradingView highlighted this shift. Red dominated both crypto and stock sectors during the announcement week. Investors began pulling out of high-risk assets.

Crypto, as a high-risk category, shows sensitivity in these conditions. It performs best when capital is cheap and liquidity is strong. With policy tightening and inflation rising, crypto demand weakens. Market behavior on the eve of Liberation Day reflects this shift clearly across sectors.

Trump Liberation Day Tariffs May Push Inflation Higher

New tariffs under Trump’s Liberation Day plan are expected to push prices higher. Import duties often lead to cost increases that move through supply chains and affect domestic prices. With many U.S. companies relying on imported goods, the inflationary effect can be immediate.

The Federal Reserve raised its 2025 core inflation forecast to 2.8%, up from 2.5%, as shown in the latest chart from the Bureau of Economic Analysis. The upward revision reflects concerns about the economic effects of the new tariffs. According to Yahoo Finance, Fed officials also lowered their economic growth forecasts for the year, citing tariff-related uncertainty.

Core inflation has remained above the Fed’s 2% target since 2022. The chart shows three key indicators—year-over-year change, six-month annualized change, and three-month annualized change—all staying above target. While inflation dipped below 2% briefly in early 2023, it quickly rebounded and stayed elevated through 2024 and into 2025.

The Liberation Day tariff package targets goods from China, Mexico, and Canada, including vehicle components and industrial materials. Some rates are as high as 25%, a level that could make price increases across consumer goods more widespread. As costs rise, businesses may reduce spending or hiring, and households may cut consumption.

For markets, higher inflation typically limits liquidity. Borrowing becomes more expensive, and asset prices—especially risk assets like crypto—often react negatively. Investors are already repositioning in response to this macroeconomic shift.

Crypto Markets in a Risk-Off Environment

Crypto markets are sensitive to broader risk sentiment. When the economic outlook worsens, investors shift to safer assets. This is called a “risk-off” move. Bitcoin, Ethereum, and other digital assets often fall during these phases.

Since January 2025, each tariff announcement triggered crypto sell-offs. The pattern has been consistent. As more trade barriers are introduced, investors exit risky trades. Capital flows into stable assets like the U.S. dollar or gold. Market behavior shows that Liberation Day is part of this pattern.

If additional tariffs are confirmed on April 2 and April 3, the trend may continue. Traders are watching for further signals from the White House and the Federal Reserve.

Analysts Weigh Outcomes as Trump’s Liberation Day Approaches

While most investors are watching how markets react to Trump’s Liberation Day tariffs, some analysts are looking beyond the immediate downturn. One scenario being discussed is a broader economic slowdown. If the tariffs disrupt global supply chains and reduce consumer spending, the U.S. could face weaker growth.

In that case, the Federal Reserve may be forced to step in. The most likely responses include cutting interest rates or introducing stimulus measures. These actions would aim to increase liquidity and support demand across sectors. A looser monetary policy often results in more favorable conditions for risk assets, including cryptocurrencies.

Former BitMEX CEO Arthur Hayes commented on this possibility. Hayes argued that “tariffs won’t stop Bitcoin” and that any economic shock would be met with Federal Reserve intervention. At the time of his comment, Bitcoin was trading at $85,000. He forecast a potential move to $110,000 if the Fed injects liquidity. Hayes also noted that if Trump applies tariffs above 50%, the crypto rally could strengthen.

While Hayes emphasized the role of central banks over tariffs, other analysts remain cautious. They note that the actual impact will depend on how broad the tariff package is and how other countries respond. As of April 1, there have been no official retaliations, but several governments have issued warnings. Diplomatic talks are ongoing.

Market Conditions Still Uncertain, Federal Reserve Response and Policy Impact

As of April 1, 2025, Trump has not released the final list of Liberation Day tariffs. The White House Rose Garden event will reveal that information. Only after that will investors see the full picture.

The crypto sector is already preparing for more volatility. Exchanges and platforms are reporting higher volumes as traders adjust. The U.S. dollar remains stable, while tech stocks and altcoins are under pressure.

Bond yields also show some stress. Higher inflation expectations are driving yields upward. That adds another layer of difficulty for markets relying on cheap credit.

The Federal Reserve’s revised inflation forecast reflects the possible effects of tariffs. At its latest meeting, it did not announce new interest rate changes. But central bank officials noted that the tariff situation is evolving.

Monetary policy decisions may shift later in 2025. For now, the Fed is holding its position. But if the cost of goods keeps rising and demand slows, rate cuts may be back on the table.