Familiar tariff scripts, what's different this time?

Written by: JW, Techub News

After a good night’s sleep, I thought I had avoided the “Monday Flash Crash,” but unexpectedly, the crypto market didn’t let go. It just postponed the sharp decline to Tuesday.

Last week, Bitcoin briefly reclaimed the $97,000 level, and the weekly close was successfully above $95,000. Generally speaking, this is a positive signal. Many in the market have started to discuss whether a second wave of bullish momentum is coming, and sentiment is gradually warming.

However, the trade war has once again reared its head.

Without much warning, a sharp retracement suddenly occurred. Within just a few hours, Bitcoin rapidly dropped, briefly falling below $90,700, before barely pulling back. It is now hovering around $91,000; Ethereum fell below $3,070 and has since recovered to around $3,090; SOL decisively dropped below $130, with a low of $127.9. According to Coinglass data, in the past 48 hours, the total liquidation in the entire crypto market approached $1 billion, with long positions totaling $566 million liquidated; over 320,000 traders were liquidated in just 48 hours. For many traders who just re-leveraged, this blow came fast and hard, leaving little room for reaction.

European markets fell first, risk sentiment begins to shift

From a timing perspective, this decline clearly started brewing during the European trading session. On that day, major European stock indices closed mostly weaker, with risk assets under pressure.

European STOXX 50 down 1.72%, UK FTSE 100 down 0.39%, France CAC40 down 1.78%, Germany DAX30 down 1.34%, Italy MIB down 1.32%.

In recent years, the correlation between crypto markets and traditional markets has become nothing new. Especially after Bitcoin returned to higher ranges, the overall market risk exposure has not been low. Once external sentiment shifts, crypto markets tend to react with amplified volatility.

This time, the trigger for the collective decline remains the familiar name: “tariffs.”

Trade war, once again in the spotlight

Today, Trump issued a tough signal again, threatening to impose new tariffs on countries opposing the “sale of Danish territory to the United States.” As soon as the news broke, the cryptocurrency market led the plunge, with US stock futures following closely.

In the afternoon, the situation escalated further. Trump announced tariffs of up to 200% on French wine and champagne. Earlier, he had already indicated plans to impose new tariffs on the EU as a whole, and reiterated that one of his primary strategic goals is to “annex Greenland.”

According to current disclosures, the U.S. plans to impose an additional 10% tariff on Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland starting February 1; and this rate will be further increased to 25% on June 1. These tariffs will not be lifted until an agreement on Greenland is reached.

Trump’s words are straightforward: “This agreement must be a comprehensive and thorough purchase of Greenland.”

For the market, the specific tariff amount is not the most urgent issue to calculate immediately. What is more concerning is that once such topics are brought to the table, it becomes difficult to resolve quickly.

Especially when discussions extend from “tariffs” to “territory” and “sovereignty,” the market will naturally choose to avoid risk.

As long as Trump is in office, trade wars will not disappear

First, it must be pointed out that as long as Trump is in office, trade wars will unexpectedly flare up and then gradually subside. Perhaps this is part of Trump’s “tariff strategy,” intentionally designed.

This is not entirely emotional manipulation; rather, it resembles a repeated, tried-and-true negotiation tactic. By threatening tariffs to create uncertainty, and pushing pressure onto opponents in advance, he aims to hold the initiative at the negotiation table.

The most recent similar event occurred on October 10 of last year, when Trump threatened to impose 100% tariffs on Chinese goods, effective from November 1—21 days away from the announcement. This timing is very “Trump,” a familiar tactic. Immediately after, S&P 500 futures widened their decline to 3.5% before the weekend close.

The threatening tone initially led the market to believe it was serious. But the final outcome was clear: this was part of his negotiation strategy, and it proved effective. In the October negotiations, both sides reached a new agreement, China lifted certain restrictions, and the 100% tariffs were never implemented.

Familiar rhythm, almost a repeat

Looking back at previous trade wars, the rhythm is almost unchanged.

This time, the news was also released on a Saturday; and Monday was a U.S. holiday, with futures markets opening only Monday evening. The market’s reaction was similar to last time—being forced to digest the news repeatedly in a low-liquidity, high-emotion environment.

Based on past experience, we can roughly predict Trump’s next moves:

On Friday, Trump issued a vague statement hinting at tariffs on a specific country or industry. As uncertainty increased, markets began to panic and decline. The initial threat was on Friday, when he threatened tariffs on Denmark.

That evening, a new high tariff exceeding 25% was announced.

Over the weekend, during market closure, tariff threats were repeatedly escalated to exert pressure and maximize the impact.

During the weekend, affected countries publicly responded or indicated willingness to negotiate.

At 6 p.m. Eastern Time Sunday, futures markets opened, and stock index futures declined amid tariff-related news.

On Monday and Tuesday, pressure continued publicly, but markets began to realize tariffs had not yet taken effect, with plans to implement after February 1.

By Wednesday, bargain buying emerged at lows, triggering a rebound, but this rally was short-lived, and prices fell again afterward.

It is expected that over the weekend, Trump will post that he is negotiating with leaders of affected countries and seeking solutions.

On Sunday evening, at 6 p.m. ET, futures markets surged higher, market sentiment rekindled, but gains faded by Monday’s spot market open.

After Monday’s open, senior officials including Treasury Secretary Yellen will hold live briefings to reassure investors and emphasize progress toward a deal.

In the next 2-4 weeks, several members of the Trump administration will continue to hint at progress in trade negotiations.

A trade deal announced will push markets to new all-time highs.

Of course, this time is not an exact copy-paste. The biggest difference is that the goal of “annexing Greenland” is far more complex than just trade terms.

Whether on political, military, or international relations levels, this issue is difficult to resolve in a short period. It suggests that the game could be prolonged, with more frequent tough talk and easing signals.

For the market, this does not mean the direction is already set, but volatility is expected to be high.

Summary

Looking back, Trump’s negotiation approach is quite clear: time points, pressure tactics, and leaving room for maneuver.

His goal is to prevent tariffs from ever truly taking effect; what he wants is an agreement. He often reserves two to three weeks of bargaining space before tariffs actually come into force. Tariffs are more a bargaining chip than an end goal. This explains why these major news events always occur on weekends or during holidays.

If these tariffs were to be fully implemented and persist long-term, it would be a disaster for global markets. But past experience shows he does not want things to go that far.

During the last US-China trade war, the original date for 100% tariffs was November 1, but on that day, both sides announced an agreement and canceled tariffs. Investors who were liquidated before then could only see it as a market cost.

Overall, this time, Trump’s plan for Greenland is clearly more aggressive than any previous trade friction, and the negotiation cycle could be longer. Market turbulence may not end quickly.

But for traders, one thing remains unchanged: “News creates volatility, and volatility itself is an opportunity.”

In such an environment, directional judgment becomes secondary; what matters more is rhythm and position management. The market may not immediately trend, but volatility will definitely be present. Surviving in a repeatedly tugged market is itself an advantage.