As China reacts to the latest round of Trump’s tariffs on Friday, announcing a 125% tariff on all American goods, vice president of the Beijing-based Center for China and Globalization, Victor Zhikai Gao, commented:
“We don’t care! China has been here for 5,000 years. Most of the time, there was no U.S., and we survived.”
When pointed out that China “will lose the U.S. market,” which accounts for 15% of all trade, he added:
“If the United States wants to bully China, we will deal with a situation without the United States, and we expect to survive for another 5,000 years.”
China’s retaliatory tariff hike came shortly after President Donald Trump raised tariffs on Chinese imports to 145%, escalating an already tense trade conflict between the two global superpowers. Trump’s tariffs have already had profound effects on international financial markets, with major stock indices experiencing significant losses since ‘Liberation Day’ on April 2, with slight recoveries reported on Friday afternoon.
Trump’s tariffs pushing countries closer to China
While many economists fear Trump’s tariffs will cause a global recession, others are keeping their eyes on Beijing’s next move with Taiwan. International relations professor Zhiqun Zhu, from Bucknell University in Pennsylvania, commented:
“If the current tariff is sustained, and China is able to weather this difficult period, it will definitely boost Beijing’s confidence in facing potential Western sanctions in a future cross-strait war.”
Like most nations, the United States does not officially recognize Taiwan as an independent country. However, Washington opposes any unilateral actions that alter the current status quo, remaining committed to supplying arms to support Taiwan’s self-defense capabilities.
Meanwhile, European Union leaders reportedly plan to travel to Beijing for a summit with Chinese President Xi Jinping in late July. The news comes after Spain’s Prime Minister Pedro Sanchez called for Europe to forge closer ties with China in the face of Trump’s tariffs, calling Beijing a “partner of the EU.”
Capital flight into Bitcoin
During mounting geopolitical tensions and market volatility, CryptoSlate has reported that Bitcoin is increasingly being seen as a market hedge. Its price has held relatively steady while stock markets have plummeted, highlighting a significant decoupling of Bitcoin and stocks and Bitcoin as a ‘risk-on’ asset.
One theory is that China may devalue the national currency, the yuan. If the PBOC (People’s Bank of China) takes this move, BitMEX founder Arthur Hayes believes the capital will flow into Bitcoin. He commented:
“CNY deval = narrative that Chinese capital flight will flow into $BTC. It worked in 2013, 2015, and can work in 2025.”
Quantitative easing, otherwise known as “money printing,” is another action that has typically seen Bitcoin and crypto markets benefit from the excess liquidity.
According to Watcher Guru, a top Fed official stated late Friday that the Federal Reserve is “ready to help stabilize the market if needed,” to which Hayes replied:
“And that’s a wrap folks. Buy everything!”
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