Article Author: 0x9999in1, MetaEra

The Smoot-Hawley Tariff Act of 1930 left a deep scar on the world economy. That tariff war, waged in the name of "protecting domestic industries," ultimately evolved into a catastrophic shrinkage of global trade, exacerbating the depth and breadth of the Great Depression. Nearly a century later, the specter of trade protectionism still lingers.

In April 2025, as the United States announced a 125% tariff on Chinese goods, the global market once again felt a familiar chill. The Chinese Ministry of Commerce quickly responded, stating that if the U.S. continued its "tariff number games," China would "not pay attention" and reserved the right to take further countermeasures. Meanwhile, the Trump administration extended an olive branch of a "90-day tariff suspension" to 75 countries, lowering the general tariff rate to 10%, while specifically excluding China, Mexico, and Canada. This highly targeted trade strategy not only significantly increased the risk of decoupling between the U.S. and China but also placed the cryptocurrency market—a new battleground for global capital flows—at a new crossroads.

The Warning of the Smoot-Hawley Tariff Act

History never simply repeats itself, but it always offers some warnings. The tragedy born from the Smoot-Hawley Tariff Act in the 1930s was that countries collectively sank into a vicious cycle of retaliatory tariffs, ultimately leading to the collapse of the international trade system. As one of the most destructive trade policies of the 20th century, the historical lessons of the Smoot-Hawley Act profoundly warn contemporary decision-makers: trade protectionism has never been a good remedy for economic difficulties. In 1930, the U.S. Congress passed this act, raising average import tariffs to a historic high of 59%, with the intention of protecting domestic industries impacted by the Great Depression, but it triggered a disastrous chain reaction.

Major global trading partners quickly adopted retaliatory tariff measures, causing the international trade system to shrink by nearly two-thirds between 1929 and 1934, with U.S. exports plummeting by 70% and global unemployment worsening further. This policy not only failed to save the U.S. economy but also prolonged and deepened the Great Depression, exposing the fatal flaws of trade protectionism: in a globalized economy, unilaterally erecting high trade barriers inevitably leads to a "boomerang effect." The more profound impact was that this act destroyed the foundation of international multilateral trade cooperation, fueled economic nationalism, and laid the groundwork for the subsequent collapse of the international economic order before World War II.

Trump's Tariff Stick Nearly a Century Later

The tariff war in 2025 differs from that of 1930 in that the U.S. is attempting to reshape global supply chains through a "selective tariff war"—applying extreme pressure on China while temporarily easing tensions with most other countries. This strategy of "divide and conquer" may seem clever, but it harbors risks. China, as the world's second-largest economy, is no longer the passive trade weakling of the 1930s. After the U.S. announced the tariff increase, China did not immediately retaliate in kind but instead adopted a "not paying attention" stance while accelerating its "de-dollarization" efforts. This strategic composure made the market realize that the new round of trade war might not evolve into a comprehensive melee like in the 1930s, but rather a more prolonged war of attrition.

The Cryptocurrency Market's Inherent Sensitivity to "Liquidity"

The Trump administration's "D-Day" tariff policy triggered severe turbulence in global financial markets, with the cryptocurrency market facing a comprehensive impact. Bitcoin fell from $83,500 to $74,500, while Ethereum saw an even larger decline, dropping from $1,800 to $1,380, and the total market value of altcoins was halved by over 40%. Market liquidity significantly contracted, with Bitcoin's monthly capital inflow plummeting from a peak of $100 billion to $6 billion, and Ethereum turning into a net outflow of $6 billion. Although there was a large-scale "surrender-style sell-off," as prices dipped, the scale of losses gradually shrank, indicating that short-term selling pressure might be nearing exhaustion.

From a technical perspective, $93,000 has become a key resistance level for Bitcoin to regain upward momentum, while the $65,000-$71,000 range is the core support area that bulls must defend (data cited from Glassnode). The market has now entered a critical phase; if it breaks below the support level, most investors may fall into unrealized losses, potentially triggering a more severe market adjustment. Overall, the cryptocurrency market is extremely sensitive to changes in global liquidity, and the uncertainty brought about by this tariff policy has caused widespread impacts. Whether the market can stabilize will depend on the subsequent policy direction and capital inflow situation.

In summary, the cryptocurrency market is both a passive sufferer and an active variable in this game. Imagine: when international tensions rise and the global monetary system is in turmoil, where can investors seek a scarce, global, and government or entity-uncontrolled digital store of value? Perhaps, as the credibility of the old order is eroded by trade wars, the seeds of a new system quietly begin to sprout.