Trump's Tariffs Spark 16% Drop in Official Meme Coin

On April 2, 2025, President Donald Trump announced a series of sweeping tariffs, which he dubbed "Liberation Day" for the auto industry. These tariffs, targeting imports from numerous countries, included a 25% additional tax on certain vehicles, even those manufactured in the United States. The cryptocurrency market, particularly the official Donald Trump meme coin, experienced a significant downturn in response to these tariffs. The meme coin, which had been gaining traction, saw a 16% decline in value over the course of a week. This drop was attributed to the market's reaction to the anticipated economic impact of the tariffs, which were seen as a potential catalyst for market turmoil.

The tariffs, which were part of a broader trade policy aimed at protecting domestic industries, were met with mixed reactions. While some saw them as a necessary measure to level the playing field for American manufacturers, others expressed concern about the potential for retaliatory measures from other countries. The impact of the tariffs on the cryptocurrency market was particularly notable. Bitcoin, which had been on a steady rise, saw a slight dip ahead of the tariff rollout. The official Donald Trump meme coin, which had been gaining popularity as a symbol of support for the president's policies, was hit particularly hard. The 16% decline in its value reflected the market's uncertainty and concern about the potential economic fallout from the tariffs.

President Trump’s “Liberation Day” saw major tariffs announced for over 180 countries. In the aftermath, global stock futures markets and Bitcoin (BTC) slumped, while Trump’s own Official Trump (TRUMP) meme coin tanked by over 15%—sinking to lows not seen since the first hours of its launch. The TRUMP token launched on Solana days before Trump’s inauguration, with the now-President embracing it as his official token and promoting it on multiple occasions. It was seen as a major sign that the incoming administration would act more favorably towards the crypto industry. As such, it soared to a $15.18 billion market cap within its first day. But it soon tumbled by over 64% to $5.42 billion, after the First Lady Melania Trump launched her own meme coin—which was later linked to the issuers of the controversial LIBRA token.

Following Liberation Day, TRUMP has tanked 15.4% to a market cap of $1.78 billion, lows only seen within three hours of the token’s launch. Its slide outpaced that of other leading cryptocurrencies, with Bitcoin (BTC) slipping 5.2% on the day, Ethereum (ETH) sliding 6.5%, and Dogecoin (DOGE) 9.8%. Trump’s ‘Liberation Day’ saw the announcement of a trade war, promising to implement tariffs across the globe. "For decades, our country has been looted, pillaged, raped, and plundered by nations near and far, both friend and foe alike," Trump said at the Liberation Day event. “Our country and its taxpayers have been ripped off for more than 50 years. But it is not going to happen anymore."

With its close ties to the President, the TRUMP meme coin has borne the brunt of the fallout from Trump’s trade war, crashing 25% in early March while Bitcoin fell just 10%. Peter Tchir, head of macro strategy at Academy Securities, called the surprisingly high tariff figures a “disaster,” while 'The Wisdom of Crowds' author James Surowiecki questioned the logic of the math used to determine each country’s tariffs. Cambodia was hit with the harshest tariffs at 49%, followed by Laos at 48% and Madagascar at 47%. Throughout the Liberation Day event, it was stated that each rate put on a nation reflected the effective tariffs that it was charging the U.S., via trade barriers and “currency manipulation.” It was explained this was calculated using “the combined rate of all their tariffs and non-monetary barriers.”

In fact, a post from White House Deputy Press Secretary Kush Desai revealed, the tariffs charged to the U.S. were calculated by taking the trade deficit with a country and dividing it by its imports. As a result, a number of surprising countries were targeted, including the Heard and McDonald Islands—which were slapped with a 10% tariff despite being uninhabited. The White House told that the islands were listed because they are Australian territories. The tariffs were also seen as a potential catalyst for broader market volatility. The S&P 500 and Nasdaq, which had been experiencing gains in the lead-up to the tariff announcement, saw their worst quarter since 2022. The auto industry, which was the primary target of the tariffs, was particularly affected, with some analysts predicting that the tariffs could lead to a significant slowdown in the sector.