Economist Alex Krüger said that the customs duty strategy that President Donald Trump will announce on April 2 will determine the direction of the markets and this may affect all financial areas, including crypto markets. Trump declared April 2 as the “Day of Freedom for the United States and signaled that it would implement new customs duties to countries around the world. However, the Trump administration gives mixed and uncertain messages about how hard the taxes will be.
Crush made critical explanation for crypto currencies
In a statement to the 208,500 followers in the social media platform X, Krüger said that April 2 could have a big impact on markets as much as the election night. “It will be the biggest event of the year, 10 times more important than FOMC meetings. Everything can be,” he stressed that this event is important to shape the future of the markets. Krüger stated that if Trump goes to alleviate in customs duties, there may be a rapid and strong rise in the markets, while the markets will force all long and short positions if he takes half steps to create uncertainty about timelines. The hardest scenario, on the other hand, predicts that if Trump literally activates customs duties, the markets could experience a rapid decrease of 10 %to 15 %.
In the worst scenario, a great economic contraction may be experienced immediately after customs duties. However, Trump is expected to slow down by making negotiations after applying taxes. In this process, there may be great negativity in the markets, which can coincide with the tax day in the United States and reach the summit in the second week of April. In such a case, Krüger pointed out that there will be great uncertainty in the markets and that investors will be negatively affected by this situation.
Symptoms of slowdown in the US economy
Stating that the American economy is currently strong, Krüger predicts that economic growth will probably slow down, regardless of the way Trump has chosen. This will become more prominent with the uncertainty and economic pressures of customs duties. However, the Krüger pointed out that most economists expect a very sharp economic contraction by the end of the year and that it was already largely priced by the markets. Investors should be prepared for fluctuations that may occur in the markets after Trump’s decisions.
The implementation of customs duties will be an important test not only for the American economy, but also for global economies. The tension that Trump will create in international relations while taking these steps may affect world trade. While the markets are curiously waiting for how Trump’s decisions will be shaped, April 2 has the potential to be a critical turning point for the world economy.
