Whale Wallet Activity: Trump's Tariffs May Trigger Trillion-Level Capital Encryption Migration

Original title: US economy braces for the largest tariffs in over a century

Original Author: Felix Jauvin

Original source:

Compiled by: Daisy, Mars Finance

The US economy is facing the most stringent tariff policies in over a century.

If Trump’s tariff policy is implemented, it may severely impact GDP, household consumption, and food prices.

At the time of writing, I am still in shock. The tariff rates announced by President Trump yesterday far exceeded even the most radical estimates.

Although the key points have been discussed repeatedly, we still need to clarify the facts: Trump has enacted a comprehensive 10% tariff policy. Tariffs will be imposed on approximately 60 countries, amounting to about half of the “total amount of unfair trade practices” calculated by the Trump administration.

According to a chart from Yale University’s think tank “Budget Lab”, the actual tax rate after the accumulation of these tariffs will reach 22.5%, setting a record high for the past century. Estimates from other institutions are even as high as 26.5% to 30%.

Source: The Budget Lab

So, how did Trump’s team calculate the scale of the “unfair tariffs” imposed on the United States? The truth is shocking—they crudely divided the U.S. trade deficit by the total exports to arrive at this figure.

Presented in charts, this calculation method shows an extremely simple linear extrapolation:

[Diagram description of the original text is retained here]

I have detailed the calculation logic of Trump’s team because the key is to make everyone see that these numbers are almost without any rigorous thinking behind them. After hastily arriving at this absurd value, they “graciously” announced that the retaliatory tariffs would only be levied at half of that value. But this cannot be considered tolerance.

Next, we analyze the potential economic impact of these policies (assuming they are truly implemented - given the current government’s erratic style, who knows if they will be enforced).

The tariff impact analysis of the “Budget Laboratory” shows:

Short-term: The growth rate of the real GDP in the United States will decrease by 0.9% to 1.0% due to the decline in tariffs in 2025.

Long term: The size of the U.S. economy will permanently shrink by 0.3% to 0.6%—equivalent to an annual loss of $90 billion to $180 billion (in 2024 dollar values). Global GDP will also continue to shrink, but it is estimated that China’s GDP will be largely unaffected.

Prices: In the short term, the price level of all goods is expected to rise by 2.1% to 2.6%, equivalent to an annual consumption loss of $3,400 to $4,200 per household (in 2024 USD). Among these, food prices are expected to soar by 3.7%, nearly double the recent grocery inflation rate.

The figure below shows the impact on GDP (Note: this does not account for retaliatory tariffs from other countries):

One of my favorite trade economists, Brad Setser, has a brilliant metaphor for this:

If you are still unaware of the impact of the oil crisis on the economy, then the consequences you are about to witness (hint: economic recession) will serve as a wake-up call for you.

What is the likelihood of this recession? Neil Dutta from Renaissance Macro Research has raised the implied probability of a recession to 89%. I place particular importance on Neil’s recession warnings because, between 2022 and 2024, when all economists were adamantly claiming a 100% chance of recession, he alone insisted that the notion of “a recession is imminent” was sheer nonsense.

Take a deep breath and stay calm.

The above analysis is based on the assumption that the tariff policy will truly be implemented. However, the entire market, including myself, seems to be self-comforting, believing that reason will ultimately prevail—let’s hope so.

Buckle up, this tumultuous journey full of uncertainty is just beginning.