Bitcoin

Bitcoin Reacts to Trump’s 25% Tariffs on Mexico and Canada: Market Volatility Amid Trade Policy Shifts

President Donald Trump is once again wielding tariffs as a significant tool in reshaping U.S. trade policy. This strategy, a hallmark of his administration both before and after his presidency, could have substantial economic implications. Tariffs, typically designed to protect domestic industries, often result in higher prices, which can, in turn, influence inflation. These price increases may force the Federal Reserve to reconsider its interest rate policies in the coming months and years.

The latest round of tariff news has already made waves in the crypto market, with Bitcoin showing a notable reaction. On Thursday, President Trump announced that 25% tariffs would be imposed on both Mexico and Canada starting February 1, pushing Bitcoin prices above $106,000 briefly. However, the euphoria was short-lived as market sentiment shifted, and the cryptocurrency quickly fell 2%, settling around $104,000. U.S. stock markets also felt the pressure but managed to finish the day with modest gains.

The tariffs, set to disrupt up to $1.6 trillion in North American trade, are particularly concerning as they target Mexico, Canada, and China. The White House’s justification centers on the illegal fentanyl trade, which they claim has resulted in the deaths of tens of millions of Americans. Karoline Leavitt, a spokesperson for the White House, confirmed that the tariffs would go into effect immediately, despite initial reports suggesting a delay until March 1.

This announcement has further destabilized Bitcoin’s price, as the cryptocurrency quickly retreated to just below $103,000, reflecting a 2.3% decline in the past 24 hours. With the crypto market’s sensitivity to global political and economic shifts, especially those involving major trade policy decisions, Bitcoin’s fluctuations underline how deeply geopolitical events can impact the digital asset landscape.

Source: CMC Data

As the situation develops, investors will closely monitor the ongoing tariff saga, with potential ripple effects on both traditional and crypto markets.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.

Also Read: Ethereum on Edge: Can ETH Surge Past $4,000 Following Bitcoin’s Steady Consolidation?

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