I’m diving deep into the current market wrap, with a particular focus on the looming “Liberation Day” tariffs announced by US President Donald Trump, set to take effect today, April 2, 2025. This pivotal moment has cast a long shadow over global risk sentiment, and it’s no surprise that investors, analysts, and everyday folks alike are on edge, waiting to see how this bold policy shift will ripple through economies and asset classes worldwide.
My perspective on this topic is one of cautious scepticism—while the intent behind these tariffs may be rooted in a desire to bolster American manufacturing and rebalance trade, the potential for unintended consequences, from inflation spikes to global trade wars, looms large. Let’s unpack this complex scenario with a thorough examination of the data, market reactions, and broader implications.
The White House has framed “Liberation Day” as a cornerstone of Trump’s economic vision—a decisive move to bring manufacturing jobs back to US soil and address long-standing trade imbalances with key partners like China, Canada, Mexico, and the European Union. The tariffs, which are being unveiled today, promise to be sweeping in scope, though the exact scale and country-specific details remain under wraps until the official announcement.
This uncertainty has fuelled a subdued global risk sentiment in the lead-up to the event, as markets grapple with the possibility of a seismic shift in trade dynamics. Economists and market watchers are particularly concerned about the potential for these tariffs to exacerbate inflationary pressures, disrupt supply chains, and dampen economic growth—not just in the US, but globally. My take? While the goal of revitalising American industry is laudable, the execution of such a broad and aggressive tariff regime could easily backfire, especially in an already fragile economic environment.
On the US economic front, recent data paints a troubling picture that only heightens these concerns. The March reading of the US ISM Manufacturing Index slipped into contractionary territory at 49.0, down from expectations of modest growth. This decline was driven by notable weakness in new orders and employment, two critical forward-looking indicators that suggest manufacturers are bracing for tougher times ahead. Even more alarming is the Prices Paid Index, which surged to its highest level since June 2022.
This spike signals that input costs are rising sharply—likely a direct result of tariff-related uncertainty and supply chain jitters. For me, this data underscores a key risk: the US economy may be heading toward stagflation, a toxic mix of stagnant growth and rising prices that could prove difficult for the Federal Reserve to navigate. The Fed, which began cutting rates in September 2024, might find its hands tied if inflation accelerates further, forcing a pivot back to tighter policy at a time when growth is already faltering.
The equity markets reflected this unease in yesterday’s volatile session. The S&P 500, a bellwether for US stocks, initially slid one per cent as investors digested the weak manufacturing data and fretted over the tariff fallout. However, a late-day rally in the technology sector—perhaps driven by bargain hunting or optimism about tech’s resilience—pushed the index into positive territory, closing up 0.4 per cent.
This recovery is a testament to the market’s ability to find silver linings, but I’m not convinced it signals a lasting reprieve. Historical trends cited by The Kobeissi Letter offer a sobering perspective: when the Fed cuts rates during a recession, the S&P 500 has typically declined six per cent within six months and 10 per cent within a year.
Given that the index is already down two per cent since rate cuts began last fall, we could be in for a rough ride if “Liberation Day” triggers a deeper economic slowdown. My view is that investors should remain cautious—yesterday’s tech-driven bounce feels more like a temporary breather than a sign of sustained confidence.
Bond markets, meanwhile, are telling their own story. Benchmark 10-year US Treasury yields dipped about 4 basis points to 4.17 per cent, hitting their lowest level since March 11. This decline suggests a flight to safety as investors seek refuge from equity volatility and economic uncertainty. The US Dollar Index, however, held steady at 104.26, showing little movement overnight. This stability might reflect a wait-and-see approach among currency traders, who are likely holding their breath until the tariff details emerge.
Gold, often a barometer of fear, edged down slightly to US$3,118.90 per ounce after hitting an all-time high of US$3,149 earlier this week. The fact that gold remains near record levels speaks volumes about the underlying anxiety in the market, even if it pulled back marginally yesterday. Brent crude, down 0.3 per cent to US$74.5 per barrel, also suggests a lack of fresh catalysts to drive oil prices higher, though tariff-induced disruptions to global trade could change that picture quickly.
Across the Atlantic, Europe offers a contrasting narrative that highlights the uneven impact of global economic pressures. The final March reading for the Eurozone Manufacturing PMI came in at 48.6, still below the 50 threshold that separates expansion from contraction. Yet, a bright spot emerged: output rose to 50.5, marking the first expansion in two years. This uptick suggests that European manufacturers might be finding their footing, perhaps buoyed by domestic demand or a weaker euro boosting exports.
Inflation, meanwhile, cooled to 2.2 per cent in March, its lowest since January 2022, bolstering expectations that the European Central Bank (ECB) will cut interest rates later this month. European equity indices broadly ended in the green yesterday, reflecting a degree of optimism that stands in stark contrast to the US’s tariff-driven angst.
From my perspective, this divergence underscores a critical point: while Trump’s tariffs aim to protect US interests, they could inadvertently hand a competitive edge to Europe, at least in the short term, by driving up costs for American firms and consumers.
In Asia, the mood is more mixed as markets brace for the tariff hammer to fall. The Reserve Bank of Australia (RBA) held interest rates steady at 4.1 per cent, as expected, and struck a neutral tone in its commentary. This decision reflects a balancing act—acknowledging global uncertainties like tariffs while keeping an eye on domestic inflation and growth. Asian equity indices showed a split performance in early trading today, with some markets holding up while others faltered.
The impending tariffs, now just hours away, are clearly weighing on sentiment, particularly for export-heavy economies like China, Japan, and South Korea. I suspect that Asia’s reaction will hinge heavily on the specifics of Trump’s announcement—targeted tariffs on China, for instance, could spark a sharper sell-off, while a broader, less discriminatory approach might spread the pain more evenly across the region.
Turning to the cryptocurrency space, Bitcoin and Ethereum offer a fascinating subplot amid this tariff-fueled uncertainty. Bitcoin has clawed its way back above US$84,000, posting a nearly two per cent gain in the past 24 hours after weeks of weakness that saw it struggle to breach US$89,000. This resilience is noteworthy, especially given the headwinds from global trade tensions and a risk-off mood among retail investors.
Institutional interest, however, remains robust—firms like Tether and Strategy are making nine- and ten-figure Bitcoin buys, and GoMining’s new US$100 million Bitcoin mining fund targets institutional players with a “fully managed, compounding hashrate strategy.” Yet, the price isn’t budging much, which suggests a disconnect between institutional accumulation and broader market sentiment.
My take? Bitcoin’s recovery is a sign of its growing status as a “digital gold” hedge, but it’s not immune to the macroeconomic storm brewing around “Liberation Day.” Technical analysis points to key resistance ahead at US$89,000—if it can’t break through, we might see another leg down.
Ethereum, meanwhile, has staged its own recovery, climbing above US$1,850 and consolidating around US$1,860. It’s trading above the 100-hourly simple moving average, with a bullish trend line forming at US$1,860 on the hourly chart. However, resistance looms near US$1,900 and US$1,920, and a failure to clear these levels could cap its upside.
Like Bitcoin, Ethereum’s fate is tied to broader market dynamics, and the tariff announcement could either bolster its safe-haven appeal or drag it down with risk assets. I see cryptocurrencies as a wild card in this scenario—capable of defying gravity if traditional markets falter, but vulnerable to a broader sell-off if recession fears take hold.
So, where does this leave us as “Liberation Day” dawns? Trump’s tariff gambit is a high-stakes roll of the dice. The intent—to reassert US economic dominance and revive manufacturing—has merit, but the execution risks sparking a global trade war, driving up inflation, and tipping an already wobbly US economy into recession. The data backs this up: manufacturing is contracting, input costs are soaring, and consumer confidence is cratering.
Markets are jittery, with equities volatile, yields falling, and gold near all-time highs. Europe might catch a break if it can capitalise on US missteps, but Asia faces a tougher road, especially if China bears the brunt of the tariffs. Cryptocurrencies, meanwhile, are a mixed bag—showing resilience but not invincibility.
For now, the markets are holding their breath too, and the next few days could set the tone for months to come. One thing’s for sure: we’re in for a wild ride.
Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.
Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.
An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.
