Trump's Tariff Exemptions: Ripple Effects on Tech and Crypto
Trump's Tariff Exemptions: Impact on Tech and Crypto
President Trump's recent exemption of various tech products, including smartphones, computer chips, and other electronics, from tariffs has provided the tech industry with much-needed relief from trade pressures. This move follows a 90-day pause on reciprocal tariffs and a reduction in tariff rates to 10% for countries without retaliatory tariffs.
Tech Stocks and Crypto Correlations
The US Customs and Border Protection confirmed the exclusions, which also encompass storage cards, modems, semiconductors, and other electronics. This action is expected to positively impact large-cap tech companies, potentially easing pressure on tech stocks—a sector significantly impacted by previous trade tensions. Given the correlation between crypto markets and tech stocks, a rally in the latter could boost the former, increasing risk appetite.
Indeed, following the announcement, Bitcoin (BTC) briefly surpassed $85,000, suggesting an immediate market response. The Kobeissi Letter noted that large-cap tech companies are poised to benefit from these developments.
Market Reactions and Expert Opinions
Prior to this, Bitcoin surged by 9% and the S&P 500 by over 10% when Trump initially announced the 90-day tariff pause. Macroeconomic trader Raoul Pal viewed the tariff policies as a negotiating tactic to secure a US-China trade deal. However, Max Keiser argued that exempting specific tech products wouldn't sufficiently lower bond yields or achieve the administration's interest rate reduction goals. He highlighted that confidence in US bonds and the dollar has been eroding for years, and this action alone won't reverse that trend. The yield on the 10-year US Treasury Bond reached approximately 4.5% on April 11, reflecting the macroeconomic uncertainty.
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Disclaimer: This article does not provide financial advice. Conduct thorough research before making investment decisions.