Top Economist and acclaimed Bitcoin critic Peter Schiff has shared his perspective concerning the ongoing tariff war between the United States and China. His commentary comes as the Trump administration prepares to implement a steep 104% tariff on Chinese goods.

Peter Schiff on US and China Trade War

In his recent X post, Schiff warned that China holds significant power over the United States and does not need to respond with tariffs to cause economic damage. 

According to him, China can deliver a financial blow by using its position as America’s largest supplier and major creditor. He explained that China could sell off US Treasury bonds instead of matching tariffs, leading to a spike in interest rates.

He also suggested that China could weaken the US economy further by shifting its goods inward. This way, the Asian giant will allow Chinese citizens to consume what is currently being exported to the US. Peter Schiff hinted that the strategy would leave American consumers without affordable goods and the credit system strained. Schiff believes such a move would crush the fragile, debt-reliant US economy.

His comments underline growing fears that this trade war if left unchecked, could have far-reaching consequences for the wider economy. Schiff released this update after Trump threatened an additional 50% tariff on China, a move the latter calls intimidation.

Overall, caution is necessary when inflation and borrowing costs are already major concerns.

The China Advantage in the US Trade War

While the US reciprocal tariff on Chinese imports is already in effect, China retaliated with a 34% hike, fueling uncertainty for Bitcoin, Ethereum, and XRP. The Peter Schiff comment suggested that China may be better positioned in a battle for economic strength.

China maintains more internal production and savings than the US, which depends heavily on imports and debt. 

Analysts have observed that if China aggressively offloads US bonds or pulls back on supplying goods, it could pressure the dollar and impact credit availability. Schiff advocates the US to take more tempered action to prevent such a move.

Crypto Market Outlook: What to Expect

It is important to add that the tariff tension between the two countries also affects the digital asset market. As reported by CoinGape, the US-China trade war fuels crypto downside risks as Bitcoin dropped below $77,000 following the reciprocal tariff updates. Even though it bounced back slightly, some experts think the recovery may not last.

The second-largest cryptocurrency, Ethereum, has also seen a price decline, falling under $1,500, and XRP is struggling. 

In line with recent uncertainties, there has been a sharp rise in crypto liquidations, with traders losing money. With warning signs showing up across the market, some believe things could get even worse in the coming days.

The post Peter Schiff Cautions US Against Trade War Escalation With China appeared first on CoinGape.

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Filed under: News - @ April 8, 2025 8:32 pm