The upcoming “Liberation Day” tariff news by Donald Trump is likely to cause a lot of trouble in global trade, but it will also affect areas other than traditional markets. When experts look at the effects of cryptocurrency’s global adoption, they should not just focus on the political and economic ones. Crypto relies on open markets and working together across borders, but Trump’s plan to change trade could lead to economic fragmentation that weakens these roots.
Multilateral Trade Agreements End
Heidi Crebo-Rediker, a senior fellow at the Council on Foreign Relations, says that Trump’s plan to raise tariffs is the same as breaking trade deals with important U.S. partners. His plan goes after the “Dirty 15,” which are the 15 biggest trading partners with whom the U.S. does 80% of its business. By breaking up these relationships and supporting one-sided tariffs and non-tariff obstacles, Trump is moving away from the cooperative global trade system that has helped digital assets grow.
Unfriendly to Crypto Growth
Global cooperation is important for crypto markets. Countries need to interconnect for digital asset infrastructure, regulatory frameworks, and capital flows. Crypto could lose value if countries start enforcing tighter capital controls or changing how they regulate because of a rise in economic nationalism. Crebo-Rediker points out that countries like Canada are already looking for alternatives to U.S. trade dominance.
With less global cooperation, investment restrictions, and inconsistent regulations, this change could make it harder for blockchain-based businesses to operate internationally.
Global Standard Loss Risk
If the U.S. stays close to home, it might not have as much of an impact on regulating digital assets and coming up with new ideas. Conversely, China is trying to become a world leader in finance by backing projects like the Digital Yuan and trade systems based on blockchain. If Western regulators can’t work together, China could have a bigger say in how digital finance works worldwide, affecting U.S.-backed crypto developments.
Conclusion
Even though Trump has been talking much lately about how much he supports crypto, his planned trade policies may affect the ecosystem that makes digital finance possible. If coordination worldwide worsens, crypto usage could stop, putting the industry in a tough spot.
