Trump’s Tariff Twist Triggers Shockwave—Is This the Spark Behind XRP and ETH’s Sudden Surge?

In an unexpected move, Donald Trump announced a 90-day pause on new tariffs, easing fears of a deepening trade war. This decision excluded China but covered all other countries, sparking a wave of relief across global markets. Trump stated via Truth Social that a 10% “Reciprocal Tariff” would take effect immediately during the pause, but warned that tariffs on Chinese goods would rise to 125% once the period ends.

It followed just a day after fierce new tariffs produced a sharp market breakdown, panic and wiped out trillions in value. The sharp turnaround looks set to reassure markets and facilitate trade talks with America’s allies, while putting the squeeze on China.

Crypto Market Surges Alongside Stocks

The crypto space reacted quickly and positively. Bitcoin shot up over 7%, again crossing the $80,000 level after a temporary slide to $75,000 mid-week. Ethereum and XRP took the altcoins by storm with stunning 12% jumps, while other large tokens such as Solana (SOL), Cardano (ADA), Dogecoin (DOGE), and Binance Coin (BNB) experienced price jumps of up to 10%.

Much of the rally was fueled by more than $350 million in short liquidations in crypto futures. When short sellers who are bearish on the market need to close out their positions, it tends to boost price advances. This boosted the momentum across the board, increasing the overall crypto market cap by about 6%.

Wall Street Sees Biggest Jump Since the 2008 Crisis

The relief wasn’t confined to cryptocurrency. U.S. equity markets had their best day in more than a decade. The S&P 500 jumped 9.5%, and the Nasdaq jumped 12%—a recovery reminiscent of post-crisis rebounds.

Experts point to the policy change as a stopgap measure to soothe financial turmoil and assuage investor fears without letting go of Trump’s negotiation leverage in coming trade negotiations. The action is largely viewed as a tactical measure to prevent an all-out recession or trade war.

China Excluded—And the World Watches Closely

Despite the pause, China remains a major outlier. Tariffs targeting Chinese imports are still expected to skyrocket to 125% once the 90-day window ends, raising concerns about a new escalation in U.S.-China trade tensions.

Treasury Secretary Scott Bessent claimed the pause was a pre-planned tactic to encourage global negotiations, but many believe the recent market chaos forced the administration’s hand. All eyes are now on China’s response and whether further retaliatory measures are in store.

Has Crypto Hit Bottom?

Jupiter Zheng, head of research at HashKey Capital, believes the crypto market may have already found a local bottom. He points to improving sentiment and signs that the worst of the downturn could be over.

Zheng also noted that positive developments in U.S. crypto regulation have likely helped offset broader economic uncertainty. While China’s potential reaction remains a wildcard, continued diplomatic efforts elsewhere could provide further momentum for both crypto and traditional markets.