Global trade tensions triggered by US President Donald Trump’s tariff measures may come to an end with a potential deal with China as investors remain concerned about escalation from both sides. Trump’s April 2 announcement of reciprocal import tariffs sent shockwaves through global equity and crypto markets. The measures include a 10% baseline tariff on all imported goods, effective April 5, with higher levies such as a 34% tariff on Chinese imports set to begin on April 9. However, the tariff negotiations may only be posturing for the US to reach an agreement with China, according to Raoul Pal, founder and CEO of Global Macro Investor. “In the end, almost all the other tariff negotiations and rhetoric are all about getting China to agree to a deal,” Pal wrote in an April 8 post, adding that both China and the US understand the need for it. China retaliated by imposing a 34% tariff on all US imports effective April 10 in response to US tariffs. China’s foreign ministry vowed to fight against Trump’s tariffs, which it called bullying by the world’s largest economy. Considering China’s latest retaliatory measures, a resolution remains unlikely in the short term. China overtook the US in 2012 to become the world’s largest trading nation by total value of exports and imports. As the trade dispute continues to evolve, analysts say a potential agreement between the two superpowers could serve as a key catalyst for the recovery in digital asset markets. Crypto markets have a 70% chance to bottom by June 2025 before recovering, Nansen analysts predicted. Investor appetite for risk assets such as Bitcoin will depend on global tariff responses from other countries, according to Nicolai Sondergaard, a research analyst at Nansen. Trump’s tariff negotiations with China remain a focal point for global markets as the outcome could have a significant impact on various sectors worldwide.