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 Smut-Holly Tariff Act of 1930 left a scar on the world economy that was difficult to heal. The tariff war, named "protecting domestic industries", eventually turned into a catastrophic shrinkage of global trade, exacerbating the depth and breadth of the Great Depression. Nearly a hundred years later, the ghost of trade protectionism is still wandering.

In April 2025, as the United States announced the imposition of tariffs on Chinese goods to 125%, the global market once again felt the familiar chill. China's Ministry of Commerce responded quickly, saying that if the US continues to "tax digital game", China will "ignor" and reserve the right to further countermeasures. At the same time, the Trump administration has issued an olive branch of "90-day tariff suspension" to 75 countries, reducing the general tax rate to 10%, excluding China, Mexico and Canada. This highly targeted trade strategy not only increases the risk of decoupling between China and the United States, but also makes the crypto market, a new battlefield for global capital flows, stand at a new crossroads.

Warnings of the Smut-Holly Tariff Act

History is never simply repeated, but it always provides some kind of warning. The tragedy of the Smut-Holly Tariff Act in the 1930s was that countries collectively sink into a vicious cycle of retaliatory tariffs, which eventually led to the collapse of the international trade system. As one of the most destructive trade policies of the 20th century, the Smurt-Holly Tariff Act has a historical lesson that warns contemporary policymakers that protectionism has never been a good solution to economic difficulties. In 1930, the U.S. Congress passed the bill to raise import tariffs on average to an all-time high of 59%, with the original intention of protecting domestic industries hit by the Great Depression, but triggering a catastrophic ripple effect.

The rapid adoption of retaliatory tariff measures by major global trading partners led to a shrinking of nearly two-thirds between 1929 and 1934, US exports plummeted by 70%, and global unemployment further deteriorated. This policy not only failed to save the US economy, but instead extended and deepened the Great Depression, exposing the fatal flaws of trade protectionism: in a globalized economy, unilaterally building high trade barriers will inevitably lead to a "boomerang effect". The far-reaching impact is that the bill destroyed the foundation of international multilateral trade cooperation, promoted economic nationalism, and laid the groundwork for the subsequent collapse of the international economic order before World War II.

Trump's tariff stick nearly a hundred years later

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

The crypto market is inherently sensitive to "liquidity"

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

From a technical perspective, $93,000 has become the 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 hold (this data is quoted from Glassnode). The current market has entered a critical stage. If it falls below the support level, it will cause most investors to fall into floating losses, which may trigger more drastic market adjustments. Overall, the crypto market is extremely sensitive to changes in global liquidity. The uncertainty brought by this tariff policy has caused widespread impact. Whether the market can stabilize will depend on the subsequent policy trend and capital return.

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, digital store of value 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 the new system will quietly sprout.