Trump tariffs spark hopes for $250B China trade deal

The ongoing trade tensions between the United States and China, fueled by President Donald Trump’s recent tariff measures, may lead to a significant trade agreement, according to Raoul Pal, CEO of Global Macro Investor.

Pal suggested that the negotiations are primarily aimed at securing a deal with China, which he described as "the big prize."

On April 2, Trump announced sweeping tariffs, including a 10% baseline on all imports and a 34% tariff on Chinese goods starting April 9.

These measures have rattled global equity and cryptocurrency markets.

Pal believes this aggressive stance is part of a strategic posturing to compel China into an agreement.

“Almost all the other tariff negotiations and rhetoric are all about getting China to agree a deal,” he said in an April 8 post on X.

China has retaliated with its own tariffs, imposing a 34% duty on U.S. imports effective April 10.

The Chinese government has vowed to “fight till the end,” labeling Trump’s actions as economic bullying.

Despite these escalations, analysts see potential for a resolution that could ease global trade concerns.

China remains the world’s largest trading nation, surpassing $4 trillion in goods trade annually since overtaking the U.S. in 2012.

A deal between the two superpowers could stabilise markets and potentially benefit risk assets like Bitcoin (CRYPTO:BTC).

Nicolai Sondergaard, a research analyst at Nansen, noted that investor sentiment hinges on how countries respond to these tariffs.

“We’ll see if other countries are willing to drop some of the tariffs because it’s very likely the U.S. will do the same,” Sondergaard said.

Previous trade agreements, such as the Phase One deal signed in January 2020, have shown mixed results.

While China committed to purchasing $200 billion in U.S. goods, many issues remain unresolved, including intellectual property rights and state subsidies.