President Donald Trump once again used tariffs to change US trade policy. This is one of his key tools both before and after becoming president. Tariffs can significantly impact inflation, as they tend to drive prices higher. This, in turn, could affect the Federal Reserve's interest rate decisions in the coming months and years.
The Bit market has recently witnessed a repetition of past trends as hopes of tariff delays were dashed. The report states that the rapid denial by the White House led to a dramatic shift in market sentiment.
Bitcoin Reacts to Tariff News
On Thursday, President Trump announced that a 25% tariff on Mexico and Canada will take effect on February 1. This news pushed Bitcoin above $106K, but the Bit soon dropped 2%, settling around $104K. The US stock market also retreated, although it still ended the day with gains.
"The President will implement tomorrow a 25% tariff on Mexico, a 25% tariff on Canada, and a 10% tariff on China for the illicit fentanyl they have provided and allowed to be distributed into our country, which has killed millions of Americans," White House spokeswoman Karoline Leavitt said during a White House press briefing.
🚨BREAKING: Karoline Leavitt confirms that the Reuters report is INCORRECT. February 1 is the final deadline for the tariffs
There will be a 25% tariff on Canada, 25% on Mexico, and 10% on China
No clarification on any exemptions
They will take effect in less than 24 hours pic.twitter.com/7pzV9pblD9— Autism Capital 🧩 (@AutismCapital) January 31, 2025
Is It True... or Not?
On Friday, Reuters reported that the tariffs could be delayed until March 1, allowing the countries to request exemptions for specific exported goods. However, the White House quickly refuted this statement, with Leavitt confirming that the tariffs, including the 10% on China, will take effect the next day.
Trump's tariffs could disrupt $1.6 trillion in trade in North America, threatening to end the free trade system that has connected the US, Mexico, and Canada for over 30 years. The potential for retaliation from both Mexico and Canada adds further uncertainty around these actions.
Tough Times Ahead for Bitcoin!
Bitcoin had risen above $106K, seemingly on its way to surpassing $109K.
However, after the tariff announcement, the price dropped sharply, with Bitcoin trading just below $103K—a 2.3% decline in the past 24 hours. The Bit market remains highly sensitive to geopolitical and economic disruptions, especially when it comes to major trade decisions.
The coming weeks may hold more surprises, as these tariffs threaten to rewrite the rules of trade and trigger market reactions that we will all feel.
