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XRP & DOGE Crash 10% as Trump’s China Tariffs Shake Markets

Arry Hashemi
Arry Hashemi
Mar. 01, 2025

Cryptocurrencies, including XRP and Dogecoin (DOGE), have suffered significant losses following the announcement of fresh tariffs by U.S. President Donald Trump on Chinese imports. Both assets plunged around 10%, reflecting heightened global market instability driven by escalating trade tensions between the world’s two largest economies.

US ChinaOn February 27, 2025, President Trump announced a 10% increase in tariffs on Chinese imports, scheduled to take effect on March 4. [Image Source: Shutterstock]

Trump’s Tariff Move Sparks Economic Concerns

On February 27, 2025, President Trump announced a 10% tariff hike on Chinese imports, set to take effect on March 4. The move is part of the administration’s efforts to pressure China into taking stronger action against the illegal drug trade, particularly fentanyl. Trump cited dissatisfaction with China’s handling of the issue as the primary reason for the new tariffs.

China’s Ministry of Commerce swiftly responded, stating it would take "all necessary measures" to protect its economic interests. This signals the potential for retaliatory measures from Beijing, adding further uncertainty to global financial markets.

Crypto Market Reactions

The cryptocurrency market was among the hardest hit sectors following the tariff announcement. XRP and DOGE both saw steep declines of around 10%, reflecting broader investor concerns over increasing geopolitical risks. Bitcoin (BTC) also faced significant losses, dropping below $80,000 to a low of $78,197 before slightly recovering to $81,193. Ethereum (ETH) followed suit, falling by 4% to $2,170.

Analysts suggest the drop is linked to a broader shift away from riskier assets amid the trade war escalation. Susannah Streeter, an analyst at Hargreaves Lansdown, noted that crypto markets tend to be highly reactive to global economic sentiment, and any disruptions in confidence quickly translate into price volatility.

Stock Market and Financial Sector Fallout

The impact of Trump’s tariff escalation was felt beyond crypto markets. ETFs tied to Chinese markets, such as the iShares MSCI China ETF and iShares China Large-Cap ETF, both dropped by over 2%. Major Chinese stocks listed on U.S. exchanges, including Alibaba and JD.com, fell by more than 2%, while PDD Holdings tumbled over 4%.

The electric vehicle sector also took a hit, with Chinese EV manufacturers Nio and Li Auto recording stock declines of approximately 3%. These movements underscore how deeply interconnected the global economy is and how trade policies influence multiple sectors.

Stephan RoachFormer Morgan Stanley economist Stephen Roach cautioned that rising trade tensions could drive inflation, especially impacting U.S. consumers. [Image Source: Getty Images]

Impact on Consumers and Trade

Beyond market volatility, the new tariffs are expected to have tangible consequences for consumers. Tariffs effectively act as taxes on imported goods, and companies often pass these costs onto consumers through higher prices. Former Morgan Stanley economist Stephen Roach warned that the escalation of trade tensions could lead to inflationary pressures, particularly for U.S. consumers.

Adding to the complexity, the Trump administration has moved to eliminate the "de minimis" rule, which previously allowed goods under $800 to enter the U.S. duty-free. This change is expected to impact small e-commerce purchases from Chinese platforms like Temu and Shein, making it more expensive for American consumers and businesses relying on cross-border trade.

The Bigger Picture

The latest developments highlight the fragility of global financial markets and how geopolitical moves can trigger rapid sell-offs. As tensions rise, the risk of prolonged economic disruptions increases, potentially affecting not just the U.S. and China but global trade networks at large.

For investors, keeping a close watch on trade negotiations and policy changes remains crucial. With market uncertainty at an all-time high, further volatility in both crypto and traditional markets is likely in the weeks ahead.