Bitcoin, Crypto & Stock Markets Recover as Trump Shows Flexibility on Tariffs #CriptoNews

Tldr

• Trump administration signals more targeted approach to April 2 tariffs, focusing on countries with trade imbalances
• Bitcoin regained momentum, rising 3.3% to $86,700 after tariff strategy shift eased economic concerns
• Federal Reserve warned tariffs could cause “transitory” price increases, while holding interest rates steady
• Global markets rallied Monday on news of the more targeted approach, with Europe’s Stoxx 600 up 0.5%
• Economic forecasters have reduced US GDP outlook from 2.4% to 2.2% for 2025 due to trade uncertainties

Bitcoin gained momentum over the weekend, climbing above $86,700 as reports emerged that the Trump administration would take a more measured approach to its planned April 2 tariffs.

The crypto market showed renewed strength after a week of volatile trading.

The White House is reportedly narrowing its tariff strategy to focus on “about 15% of nations with persistent trade imbalances with the U.S.,” according to Treasury Secretary Scott Bessent. This more targeted approach has eased concerns about widespread economic disruption.

Bitcoin traded up 3.3% on Sunday, reaching $86,700 by midnight. This recovery follows a volatile week that saw prices drop as low as $81,200. The broader crypto market also gained ground, with total market cap increasing by 0.7%.

President Trump previously declared April 2 as “Liberation Day,” when he planned to impose sweeping tariffs across multiple sectors and trading partners. Markets had been on edge about the potential economic impact of these broad measures.

The revised tariff approach represents a shift from earlier statements by Trump. While maintaining his “fair and reciprocal” trade stance, the president hinted at some flexibility, particularly regarding China.

During Oval Office remarks on Friday, Trump said, “I don’t change. But the word flexibility is an important word. Sometimes it’s flexibility. So there’ll be flexibility, but basically it’s reciprocal.”

Talks with China

The president also mentioned the possibility of talks with China on trade issues. He expressed hope to meet with Chinese President Xi Jinping soon, suggesting room for negotiation with one of America’s largest trading partners.

The softer tone on tariffs helped global markets recover on Monday. Europe’s Stoxx 600 index opened 0.5% higher, with gains led by tariff-sensitive sectors such as commodity producers and automakers. S&P 500 futures added 0.9%.

Despite the market reprieve, economic forecasters continue to adjust their outlooks downward. The Organisation for Economic Co-operation and Development has revised its U.S. GDP forecast from 2.4% to 2.2% for 2025 and from 2.1% to 1.6% for 2026.

Federal Reserve

Federal Reserve Chair Jay Powell warned last week that tariffs could cause “transitory” price increases for consumers and businesses. He noted that both market and survey-based measures of inflation expectations have recently moved up, with respondents citing tariffs as a driving factor.

The Fed decided to hold interest rates steady last week. This decision, combined with cooling Consumer Price Index numbers of 2.8% from February, has led some investors to see signs of easing financial conditions.

Cryptocurrency analysts note that while tariffs don’t directly impact Bitcoin prices in the short term, the digital currency has been “swept up in broader macro uncertainty.” Zach Pandl, head of research at Grayscale, told Decrypt that “higher policy uncertainty has caused investors to reduce portfolio risk across the board.”

A Bloomberg study indicates that Trump’s implemented or threatened tariffs have already affected at least $1.8 trillion in global trade. Current measures include 25% duties on worldwide steel and aluminum, 25% on non-compliant USMCA goods, and an additional 10% on Chinese imports.

The European Union has delayed its retaliatory tariffs on U.S. goods to allow for “additional time for discussions with the U.S. administration.” However, the EU stated it was not seeking to “diminish the impact of our response” and continues to prepare for retaliation of up to €26 billion.

Economists warn of potential stagflation risk, with both price growth and unemployment possibly trending higher. Gregory Daco, chief economist for EY-Parthenon, noted that “consumer sentiment has plunged, small business uncertainty is near record highs, purchasing managers are increasingly downbeat, and consumer inflation expectations are surging.”

For now, investors appear cautiously optimistic about the more targeted tariff approach. Bitcoin’s weekend recovery suggests the crypto market sees the shift as a positive development for risk assets in the near term.