From the tariff war in 1930 to the Sino-US game in 2025: Changes in the crypto market under the shadow of the trade war

Article author: 0x9999in1, MetaEra

The Smoot-Hawley Tariff Act of 1930 left an incurable scar on the world economy. The tariff war, launched in the name of "protecting domestic industries," eventually led to a catastrophic contraction of global trade, exacerbating the depth and breadth of the Great Depression. Nearly a hundred years later, the ghost of trade protectionism is still lingering.

In April 2025, as the United States announced that it would increase tariffs on Chinese goods to 125%, the global market once again felt the familiar chill. The Chinese Ministry of Commerce responded quickly, saying that if the United States continued the "tariff numbers game", China would "ignore it" and reserve the right to further retaliate. At the same time, the Trump administration extended an olive branch of "90-day tariff suspension" to 75 countries, reducing the general tariff rate to 10%, excluding China, Mexico and Canada. This highly targeted trade strategy not only increased the risk of decoupling between the Chinese and American economies, but also put the crypto market, a new battlefield for global capital flows, at a new crossroads.

The Smoot-Hawley Tariff Act

History never repeats itself, but it always provides some kind of warning. The tragedy of the Smoot-Hawley Tariff Act in the 1930s was that countries collectively sank into a vicious cycle of retaliatory tariffs, which ultimately led to the collapse of the international trade system. As one of the most destructive trade policies of the 20th century, the historical lessons of the Smoot-Hawley Tariff Act are a profound warning to contemporary decision-makers: trade protectionism has never been a good solution to economic difficulties. In 1930, the U.S. Congress passed this bill to raise import tariffs to an average of 59%, a historical high. The original intention was to protect domestic industries hit by the Great Depression, but it triggered a disastrous chain reaction.

Major global trading partners quickly adopted retaliatory tariff measures, causing the international trade system to shrink by nearly two-thirds between 1929 and 1934, U.S. exports to plummet by 70%, and global unemployment to worsen. This policy not only failed to save the U.S. economy, but prolonged and deepened the Great Depression, exposing the fatal flaw of trade protectionism: in a globalized economy, unilaterally raising trade barriers will inevitably lead to a "boomerang effect." The more far-reaching impact is that the bill destroyed the foundation of international multilateral trade cooperation, fueled economic nationalism, and laid the groundwork for the subsequent collapse of the pre-World War II international economic order.

Trump's tariff stick nearly a hundred years later

The difference between the tariff war in 2025 and that in 1930 is that the United States is trying to reshape the global supply chain with a "selective tariff war" - putting extreme pressure on China while temporarily easing the pressure on most countries. This strategy of "differentiation and disintegration" seems smart, but it actually hides risks. As the world's second largest economy, China is no longer the weak trade country that passively accepted the challenge in the 1930s. After the United States announced the imposition of tariffs, China did not immediately take reciprocal retaliation, but instead handled it coldly with a "ignoring" attitude, while accelerating the "de-dollarization" layout. This strategic determination makes the market realize that the new round of trade war may not evolve into a full-scale melee in the 1930s, but a more protracted war of attrition.

The crypto market is inherently sensitive to “liquidity”

The Trump administration's "Liberation Day" tariff policy has caused severe shocks in global financial markets, and the crypto market has suffered a comprehensive impact. Bitcoin fell from $83,500 to $74,500, and Ethereum fell even more, from $1,800 to $1,380. The total market value of altcoins has been cut by more than 40%. Market liquidity has shrunk significantly, with Bitcoin's monthly capital inflows plummeting from a peak of $100 billion to $6 billion, and Ethereum's net outflow turned to $6 billion. Although there has been a large-scale "capitulation sell-off", as prices fall, the scale of losses has gradually narrowed, indicating that short-term selling pressure may be exhausted.

From a technical perspective, $93,000 has become a key resistance level for Bitcoin to regain its upward momentum, and the $65,000-71,000 range is the core support area that bulls must defend (the data is quoted from Glassnode). The current market has entered a critical stage. If it falls below the support level, most investors will suffer floating losses, which may trigger more drastic market adjustments. Overall, the crypto market is extremely sensitive to changes in global liquidity. The uncertainty brought about by this tariff policy has caused widespread impact. Whether the market can stabilize will depend on the subsequent policy direction and capital repatriation.

In short, the crypto market is both a passive bearer and an active variable in this game. Just imagine: when the international situation is tense and the global monetary system is in turmoil, where can investors find a scarce, global, and digital value storage method that is not controlled by any government or entity? Perhaps, when the credibility of the old order is eroded by the trade war, the seeds of a new system will quietly sprout.