Trump tariff troubles and DOJ sheds crypto task force

Markets swung widely this week on shifting tariff policy from the Trump Administration. Plus, the administration is rolling back crypto-related measures and rules from the Biden administration.

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Trump’s tariff policy rattles (then rally) markets

The Trump administration hit pause on its reciprocal tariff policy this week, announcing a 90-day stay on the previously proposed tariffs schedule. In the interim, the reciprocal tariffs for over 180 countries will be subject to a flat 10%, except for China, which will face a 125% tariff. – link

OUR TAKE: Markets like certainty, and Trump’s tariff policy has been anything but certain.

The U.S. stock market suffered one of its worst days on record last Friday in response to the original reciprocal tariffs, which were slated to take effect April 9. The sudden course reversal on Wednesday sent stocks surging, with the S&P 500 gaining 9.5% on the day for the 3rd highest daily close in the index’s history since 1950. The party was short lived, though, and stocks retracted on Thursday.

I’m not going to opine on the efficacy or impotence of Trump’s tariff policy. If it works and actually restores American manufacturing and balances the trade deficit (a herculean task), the benefits won’t materialize for some time. If it fails (and maybe even if it succeeds), markets around the world will tailspin into recession, and this administration or the next may roll them back if they prove ineffectual. I will say, though, that flip-flopping on these policies is almost as unsettling to the market as the most drastic policies themselves.

Take, for example, the bitcoin mining companies who spent double to quadruple the normal air freight rate to pull forward imports of ASIC miners. These companies thought that they were getting the better end of the deal by outrunning tariffs. Now, they paid more for shipping than they probably needed to now that tariffs on ASIC miners are reduced from 24-36% to 10%.

If you’ve been reading or listening to our content recently, you know that these tariffs are going to hit the U.S. mining industry hard. The ramifications could chip away at America’s hashrate dominance and slow hashrate growth in the near term.

But depending on who you ask, maybe both of those are good things after all…

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US Justice Department disbands Bitcoin and Crypto Enforcement Unit

​The U.S. Department of Justice is dissolving the National Cryptocurrency Enforcement Team. The division was responsible for investigating criminal activity linked to cryptocurrency and was established under the Biden administration.– link

President Trump signs resolution erasing IRS crypto rule targeting DeFi

President Trump signed a congressional resolution to disband an IRS rule that classified DeFi platforms as brokers, which required them to keep tabs on user activity. The short-lived rule was ratified in the final days of the Biden administration. - link

Bitcoin-backed loan Firefish service closes $1.8 million

Firefish, an open marketplace for bitcoin-backed loans, closed a $1.8 million seed round this week, drawing investment from bitcoin software and services firm Braiins among others. Firefish offers USDC loans for U.S. and international users.- link