Traders struggle to predict Trump’s tariff policy shifts as legal battles reshape market landscape

Bloomberg’s Mark Burton, who covers industrial metals, has been tracking the growing unease among traders trying to position themselves around a tariff policy that keeps shapeshifting. The core problem is straightforward: even after the US Supreme Court ruled 6-3 on February 20, 2026, to limit Trump’s expansive use of tariffs under the International Emergency Economic Powers Act (IEEPA), the White House signaled it would simply find alternative legal channels to impose them. Traders who thought the court ruling would bring clarity got a rude awakening.

The court ruled, markets shrugged, then panicked

Bitcoin’s initial reaction looked like relief. The asset surged approximately 2% to above $68,000 in the hours following the ruling. Then it gave back those gains almost entirely.

The administration has been explicit about pursuing alternative frameworks for imposing tariffs. That means the underlying source of uncertainty, whether and when new trade barriers will materialize, hasn’t actually been resolved. The legal channel changed. The intent didn’t.

Crypto’s tariff sensitivity is no longer a footnote

The data tells a clear story. Crypto markets experienced a 4% drop in total market cap back in March 2025 when new tariffs were introduced. Intraday swings of up to 12% have been recorded in direct response to tariff-related announcements.

The mechanism isn’t complicated. Tariff announcements trigger risk-off sentiment across global markets. When institutional investors de-risk, they sell volatile assets first.

The China factor and global liquidity

One of the more interesting dynamics Burton and other market observers have noted is how China’s export performance has adapted to US tariffs rather than crumbling under them. China’s resilient export activity in the face of trade barriers has influenced global liquidity patterns. When Chinese manufacturers find alternative markets or absorb tariff costs, the expected economic disruption doesn’t fully materialize.

For Bitcoin and crypto more broadly, this matters because global liquidity is one of the strongest predictors of crypto market performance. The tug-of-war between tariff-induced economic disruption and China’s ability to navigate around those tariffs creates a liquidity picture that’s genuinely difficult to model.

Copper and other industrial metals that Burton covers are experiencing similar dynamics.

What this means for investors

The practical challenge for anyone holding crypto right now is that traditional hedging strategies assume you can assign probabilities to outcomes. When the president loses in court and immediately signals a workaround, those probabilities become nearly impossible to calibrate.

Some traders are turning to derivatives to manage tariff-related risk, using options strategies to cap downside while maintaining upside exposure. That’s sensible in theory, though options premiums in crypto tend to be expensive precisely when you need them most.

Watch for two things in the coming weeks. First, any concrete moves by the administration to deploy alternative legal frameworks for tariffs. Second, changes in US-China trade flows that could signal shifts in global liquidity conditions.

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