Trump just walked back his harshest trade threat yet. Markets noticed immediately.
The president told Fox News that 100% tariffs on China “won’t stand.” That’s a sharp reversal from recent rhetoric. And it sent a relief wave through crypto markets that had been bracing for escalation.
Bitcoin jumped nearly 2% in the hour after his comments. Plus, other major cryptocurrencies followed the bounce. The move shows how sensitive crypto remains to macroeconomic shifts and geopolitical tension.
What Trump Actually Said
During a Fox News interview Friday, Trump discussed his upcoming meeting with Chinese President Xi Jinping in South Korea. The tone shifted noticeably from his earlier aggressive stance.
“They’re always looking for an edge. They ripped off our country for years,” Trump said. But he quickly added that the dynamic has changed. When asked directly if 100% tariffs could hold, he said no. “That wouldn’t be sustainable.”
He went further. “I think we’re gonna do great with China.” That’s worlds apart from the confrontational language that dominated headlines just days earlier.
So why the sudden shift? Trump framed it as strategic positioning before negotiations. However, the timing suggests pressure from markets and business groups may have played a role.
Markets Were Already Bleeding
Last week was brutal. Trump announced sweeping new tariffs and export controls targeting China. The move escalated trade tensions to levels not seen since 2019.
Risk assets got hammered. Bitcoin dropped. Ethereum fell harder. Traditional markets tumbled alongside crypto. The fear was simple: a full-blown trade war would crush global growth and send capital running for safety.
That made Trump’s Friday comments all the more significant. Markets interpreted them as a de-escalation signal. Risk appetite returned. Crypto led the rebound.
Bitcoin wasn’t alone in the recovery. Top cryptocurrencies across the board showed green. The bounce reflected renewed confidence that the worst-case scenario might be off the table.
Why Crypto Cares About Trade Policy
Crypto markets hate uncertainty. Trade wars create massive uncertainty.
First, aggressive tariffs threaten global economic growth. Slower growth means less capital available for risk assets like Bitcoin. Investors shift to safer holdings during economic turbulence.
Second, trade tensions increase the appeal of safe-haven assets. Traditionally, that means gold and bonds. Crypto has tried to position itself as digital gold. But during acute crises, investors still flee to traditional safe havens first.
Third, regulatory uncertainty compounds during trade conflicts. Governments focused on economic warfare often tighten capital controls. That makes moving money across borders harder. And cross-border capital flows are crypto’s bread and butter.
So Trump’s softer stance removes one major source of uncertainty. That’s bullish for crypto, even if the impact proves temporary.
The China Meeting Looms Large
Trump’s meeting with Xi Jinping happens in two weeks. That’s the real test.
The Friday comments set a collaborative tone. But Trump has reversed himself before. Plus, China hasn’t responded publicly yet. Their reaction will determine whether this de-escalation sticks.
Moreover, Trump faces domestic pressure from hawks who want tougher China policies. Walking back tariff threats could anger that base. So he might toughen his stance again before the meeting.
Still, markets tend to price in what politicians say today, not what they might say tomorrow. And today’s message was clearly conciliatory.
For crypto traders, that means watching the meeting closely. A successful negotiation could extend this relief rally. A breakdown could send Bitcoin tumbling again.
What This Means for Your Portfolio
Short-term traders jumped on the bounce. That makes sense. A 2% move in an hour offers quick profit opportunities.
But longer-term holders should stay cautious. One conciliatory comment doesn’t erase trade war risks. The situation remains fluid. And Trump’s track record suggests volatility ahead.
Also, remember that crypto’s correlation with traditional markets strengthened recently. When stocks fall, Bitcoin often follows. That wasn’t always true. But the pattern has held for months now.
So diversification matters more than ever. Don’t bet your entire portfolio on crypto continuing this bounce. Trade tensions could flare again at any moment.
The Bigger Picture Nobody Mentions
Here’s what bugs me. Crypto was supposed to be uncorrelated with geopolitical drama. It was marketed as a hedge against exactly these kinds of government policy swings.
Instead, Bitcoin trades like a tech stock. It rallies on risk-on sentiment and crashes when fear spikes. That’s not digital gold behavior. That’s just another speculative asset.
Maybe that changes over time. Maybe crypto matures into the uncorrelated asset class bulls promise. But right now? It’s deeply tied to macroeconomic trends and political theater.
So treat it accordingly. Trump’s comments bought crypto some breathing room. But the next headline could reverse everything just as fast.
Your moves depend on your timeline and risk tolerance. Just don’t confuse a 2% bounce with a fundamental shift. The trade war threat still lurks. And crypto remains vulnerable to the next escalation.