Bitcoin experienced a significant drop of 4.2% following President Donald Trump’s announcement to increase tariffs on Canadian steel and aluminum, raising them from 25% to 50%. This drastic measure, effective March 12, was triggered by Ontario’s existing 25% tariff on U.S. electricity, according to Trump’s recent post on Truth Social.
In his statement, Trump not only criticized Canada’s tariffs on U.S. dairy products—which range from 250% to 390%—but also threatened to declare a national emergency regarding electricity, claiming it was an “abusive threat” from Canada. He has called for Canada to abolish these tariffs, urging that the current situation requires urgent action.
As if this weren’t enough, Trump issued stark warnings that if Canada fails to eliminate what he termed “egregious tariffs”, the U.S. would respond by substantially increasing tariffs on Canadian automobiles starting April 2. Such actions could potentially “shut down the automobile manufacturing business in Canada”, according to the President. Furthermore, Trump provocatively suggested that Canada should consider becoming the “Fifty-First State” of the U.S., which would eliminate tariffs entirely.
The market reacted swiftly to this news; Bitcoin’s value fell below $80,000, hitting a low of approximately $76,784 before recovering slightly above $81,000 at the time of this writing. The Dow Jones also faced turmoil, dropping nearly 600 points. Investor sentiment around the increasing trade tensions was further hampered by the administration’s statement indicating no plans for new Bitcoin purchases for the national strategic reserve.
The ongoing tariff dispute reflects a growing tension in U.S.-Canada relations, following similar tariffs imposed on Canadian and Mexican goods in the past. Both Canada and Mexico have voiced their discontent, claiming that these actions violate existing trade agreements. As trade dynamics continue to evolve, the implications for both Bitcoin and broader market conditions remain to be seen.
The response from investors towards Bitcoin and other cryptocurrencies warrants close observation, especially as the geopolitical landscape shifts. Crypto enthusiasts should be prepared for potential volatility in the market driven by external economic pressures and policy changes.
