President Trump has announced new tariffs on Canadian steel and aluminum, raising concerns about market volatility. This move could worsen the already uncertain crypto industry, which is facing bearish trends due to economic instability. Although the tariffs may not be enforced or could be reversed, the uncertainty is alarming.
This announcement follows rising tensions between the U.S. and Canada. Trump has even suggested that the U.S. should annex Canada, which adds unpredictability to the situation. Earlier in February, Canada and Mexico managed to delay similar tariffs, providing temporary market stability. However, Trump is now imposing a 50% tariff on Canadian steel and aluminum, effective March 12, in response to Ontario’s 25% tariff on U.S. electricity imports.
Trump later clarified that these tariffs have a strict deadline and expressed concerns about trade issues beyond metals, such as dairy and automobile production. His extreme call for annexation reflects the political tensions fueling this trade dispute.
The ongoing trade battle has significantly affected both economies. The U.S. previously imposed tariffs on China, leading to retaliatory measures. Canada followed suit, increasing nationalist sentiment and political support for its government. This cycle of retaliation complicates finding a resolution.
For the crypto industry, this economic instability is detrimental. Tariff announcements have historically led to price drops, with Bitcoin and other cryptocurrencies struggling. The new Canadian tariffs could worsen these losses, although their impact on the market remains uncertain.
Before this announcement, the financial outlook was already bleak. High crypto liquidations and weak investor sentiment were evident. While the tariffs could add pressure, some analysts believe the market was already declining due to other factors. The true impact of crypto will become clearer in the coming days.
There is still a chance that the tariffs may not last, as Trump has previously backed down from similar measures. However, the uncertainty surrounding these policies poses the biggest risk. If investor confidence wanes, the crypto market could face lasting consequences. The next few days will determine whether these tariffs will persist or be another fleeting political tactic.
