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Last Updated:  
April 4, 2025
2 min read

The Highest Weighted Average Tariff Rate in a Century

After the unveiling of his reciprocal tariffs, the US weighted average tariff rate is now the highest it has been in a century. The S&P 500 Index experienced its largest single day loss since June 2020 and BTC fell to $81K. Despite those moves, President Trump claimed "the markets are gonna boom". That's clearly fallen on deaf ears in derivatives markets where BTC and ETH volatility smiles are still majorly skewed towards puts. Separately, Coinbase has filed with the CFTC to launch a new XRP futures contract which, if approved, will launch on April 21.

Daily Updates:

  • After the unveiling of the US’s “Liberation Day” tariffs which have dominated narratives across financial markets, the S&P 500 Index lost more than $2.5T yesterday. The index dropped by -4.84%, the single largest single-day drop since June 2020. 
  • As seen in the first chart attached, the US weighted average tariff rate is now 29% – higher than the World Trade Organisation’s GATT and the Smoot-Hawley Act in 1930 – some of the last major tariff agreements. 
  • The decline in the SPX was broad-based too, as over 80% of the index’s companies dropped, particularly those reliant on overseas manufacturing. 
  • Despite that broad de-risking across American companies, when President Trump was asked yesterday "The markets today are way down, so how is it going?”, he responded with “I think it’s going very well” and that “the markets are gonna boom, the stock is gonna boom, the country is gonna boom”. 

  • The slump in risk-on behaviour yesterday did not spare Bitcoin, which was down close to 5% yesterday, reaching $81K. Additionally, SOL fell more than 10% intraday, though crypto-assets have pared back some of those losses in the early hours of today’s trading session. 
  • BTC’s implied volatility term structure has normalised from the flat shape yesterday, and ETH’s term structure, seemingly at a lag to BTC’s, is now much flatter than the inverted shape it has held since March 30. 
  • Both assets volatility smiles are still majorly skewed towards puts, with only a 0.4% difference between 180-day tenor BTC skew and ETH skew, towards BTC. 
  • The response from risk-on assets and crypto relative to gold is telling – bullion closed the day down 1%, after breaking through $3,000/ oz for the first time in late March. 
  • The US 10-year treasury yield is now below 4%, a level last seen in October 2024 and more than 30bps lower than prior to Trump’s election victory in November, as markets now get closer to pricing in 4 rate cuts for the year amidst growth concerns. 

  • Based on articles from various news outlets, economists have been scratching their heads at Trump’s reciprocal tariffs formula. The formula itself was notionally designed to tariff countries based on their own tariffs and non-tariff barriers against the US, but instead more simply and perhaps crudely compares a nation’s surplus with the US relative to its total exports – that means the percentages calculated are a measure of the trade imbalance between two countries, not the trade barriers, and equally does not account for non-tariff/ currency manipulation factors. 

  • Sumitomo Mitsui Banking Corporation have partnered with Ava Labs, TIS, and Fireblocks to explore the commercialisation of stablecoins, focusing on their issuance and circulation, as well as the extent of their potential use cases. This collaboration aims to develop the necessary technical, regulatory, and market infrastructure to support stablecoin adoption in Japan and internationally.
  • Coinbase has filed for approval with the CFTC to launch a new XRP futures contract which, if approved, will launch on April 21. Coinbase proposes to list the three nearest monthly contracts, with each contract representing 10,000 XRP and settled in USD. Trading will follow set hours and use Coinbase's benchmark index to determine prices.

This Week’s Calendar:

Charts of the Day:

Figure 1. US weighted average tariff rate where the blue dot represents the market’s expectation of tariffs prior to the announcement, green dot represents the average tariff rate according to Trump’s announcement and orange dot encapsulates the “Liberation Day” tariffs plus additional, not yet confirmed, sector-specific tariffs. 
Figure 2. Historical Fed Funds futures-implied probabilities of the Federal Funds Rate on Dec 10, 2025. Source: CME FedWatch tool

Figure 3. BTC at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes
Figure 4. ETH at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes
Figure 5. BTC 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes
Figure 6. ETH 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes
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Daily Updates:

  • After the unveiling of the US’s “Liberation Day” tariffs which have dominated narratives across financial markets, the S&P 500 Index lost more than $2.5T yesterday. The index dropped by -4.84%, the single largest single-day drop since June 2020. 
  • As seen in the first chart attached, the US weighted average tariff rate is now 29% – higher than the World Trade Organisation’s GATT and the Smoot-Hawley Act in 1930 – some of the last major tariff agreements. 
  • The decline in the SPX was broad-based too, as over 80% of the index’s companies dropped, particularly those reliant on overseas manufacturing. 
  • Despite that broad de-risking across American companies, when President Trump was asked yesterday "The markets today are way down, so how is it going?”, he responded with “I think it’s going very well” and that “the markets are gonna boom, the stock is gonna boom, the country is gonna boom”.

Daily Updates:

  • After the unveiling of the US’s “Liberation Day” tariffs which have dominated narratives across financial markets, the S&P 500 Index lost more than $2.5T yesterday. The index dropped by -4.84%, the single largest single-day drop since June 2020. 
  • As seen in the first chart attached, the US weighted average tariff rate is now 29% – higher than the World Trade Organisation’s GATT and the Smoot-Hawley Act in 1930 – some of the last major tariff agreements. 
  • The decline in the SPX was broad-based too, as over 80% of the index’s companies dropped, particularly those reliant on overseas manufacturing. 
  • Despite that broad de-risking across American companies, when President Trump was asked yesterday "The markets today are way down, so how is it going?”, he responded with “I think it’s going very well” and that “the markets are gonna boom, the stock is gonna boom, the country is gonna boom”.