Trump's Tariff Exemptions Ease Tech Sector Concerns, Crypto Volatility Persists

Official Trump's latest price was $8.24, down 4.54% in the last 24 hours. This cryptocurrency, named after the former U.S. President Donald Trump, has been making waves in the digital currency market. The recent volatility in the crypto market has been attributed to various factors, including global trade tensions and economic uncertainties.

Donald Trump's administration has made a significant decision to exempt smartphones and other consumer electronics from its harsh “reciprocal” tariffs. This move is seen as a major relief for companies like Apple, Microsoft, and Nvidia, who have been heavily impacted by the trade tensions with China. The exemption covers a wide range of items, including smartphones, routers, laptops, and chipmaking equipment. This decision comes shortly after Trump imposed 125% tariffs on Chinese imports, which sent shockwaves through global markets. The White House emphasized that US tech firms are now working to bring production back to the US, in line with Trump’s push for tech independence from China. However, the broader 20% tariffs on Chinese goods tied to fentanyl production remain in place.

While the exemptions mirror similar decisions made during earlier trade wars in 2018 and 2019, experts warn that Trump could reverse course again. China called the exemption a small but positive move, though it continues to monitor the broader impact. The decision to exempt these items is seen as the first real sign that Trump might ease trade tensions with China, offering a glimmer of hope for a more stable economic environment.

Donald Trump’s escalating global trade war has pushed markets to the brink this week, causing a spiraling U.S. dollar "confidence crisis" amid fears of "collapse." The Federal Reserve, which stepped in to calm markets during the Covid panic, is closely watching the Treasury market for signs of further convulsions caused by Trump’s tariffs. A top Federal Reserve official has said it “would absolutely be prepared" to step in to rescue markets if U.S. president Trump’s trade war threatens the financial system.

Earlier this month, traders ramped up their bets that the Federal Reserve will be forced to cut interest rates to stave off a U.S. recession. However, Collins said emergency rate cuts would not be the Fed’s primary tool for responding to market’s failing. In 2020, the Fed restarted its 2008 financial crisis-era programs of quantitative easing while cutting rates to near-zero and scrapping its cap on the number of Treasuries it could buy.

This coming week, Fed chair Jerome Powell, who is at loggerheads with Trump over the need for interest rate cuts, is due to speak at the Economic Club of Chicago on Wednesday in what will be a closely-watched speech. Trump’s fast-moving approach to tariffs and trade negotiation—that’s seen China hit with levies of almost 150% before a carve out was announced for smartphones, computers and some other electronics—has seen the U.S. 10-year Treasury yield jump 0.5 percentage points to 4.5% over the past week, spooking markets with its outsized swings.

Crypto and stock markets have been on a rollercoaster that’s caused some of the most extreme volatility ever seen. After Trump announced a 90-day pause on some reciprocal tariffs, the S&P 500 posted its third-largest one-day gain since World War II, while the Nasdaq had its second-best session ever following a steep multi-trillion dollar sell-off. Meanwhile, business leaders on Wall Street and across the U.S. are warning the economy is buckling under the pressure of tariff uncertainty.