Bitcoin prices took a hit once again as President Donald Trump announced a significant tariff increase on Canadian steel and aluminum. The move, which saw tariffs on Canadian steel and aluminum rise from 25% to 50%, was in response to Ontario’s 25% tariff on U.S. electricity. Trump made the announcement via his Truth Social post, stating that the new tariffs would come into effect on March 12.
In addition to the tariff increase, Trump called on Canada to remove its high dairy tariffs, which range from 250% to 390%. He also warned of potential higher tariffs on Canadian cars by April 2. The President criticized Canada’s tariffs on U.S. dairy products as “outrageous” and threatened to declare a national emergency regarding electricity to counter what he described as an “abusive threat” from Canada.
Furthermore, Trump warned that if Canada does not eliminate other “egregious” tariffs, the U.S. would substantially increase tariffs on Canadian automobile imports starting April 2, potentially impacting the automobile manufacturing business in Canada. Trump suggested that Canada should become the “Fifty-First State” of the U.S. to eliminate tariffs and other trade barriers.
The announcement had immediate effects on the markets, with Bitcoin falling 4.2% and dipping below $80,000. The Dow Jones also dropped nearly 600 points in response to the trade tensions. Investors reacted not only to the tariff dispute but also to the administration’s statement that no new Bitcoin purchases were planned for the national strategic reserve. Despite the initial drop, Bitcoin rebounded to above $81,000 at the time of writing.
This tariff dispute comes on the heels of previous tariffs imposed by Trump on Canadian and Mexican goods. Both Canada and Mexico have pushed back against these tariffs, citing violations of trade agreements. The ongoing trade tensions between the U.S. and its neighbors continue to impact various markets, including the cryptocurrency market.
As the situation unfolds, investors and market analysts will be closely monitoring developments to assess the potential impact on Bitcoin and other financial markets. The uncertainty surrounding trade relations between the U.S. and its trading partners adds another layer of complexity to an already volatile market environment.