Bitcoin experienced a sharp decline to $81,000 after reaching highs of $88,000 during President Donald Trump’s latest tariff announcement. Initially, the market reacted positively to the news of a 10% baseline tariff on all imports, which was less than expected. However, shortly after, Trump disclosed higher tariffs on specific countries, leading to a significant reversal in the markets—including Bitcoin.
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On Wednesday, Trump rolled out extensive reciprocal tariffs, referring to the day as “Liberation Day.” The new policy sets a 10% baseline tariff on all imports to the U.S., but many countries will incur much higher rates depending on their taxation of U.S. goods.
For example:
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China will be subject to a 34% tariff under this new policy.
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Vietnam (46%), Taiwan (32%), Switzerland (31%), and India (26%) will also face significantly higher import duties.
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Among the steepest tariffs are those imposed on Cambodia (49%), Bangladesh (37%), and South Africa (30%).
Trump defended the tariffs as a means to eliminate America’s trade deficit and safeguard U.S. manufacturers. Yet, economists caution that this could lead to inflation and ignite a global trade war, prompting other nations to retaliate with their own tariffs on American goods. Mark Zandi, chief economist at Moody’s Analytics, warned that prolonged tariffs could drag both the U.S. and its trading partners into recessions.
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When Trump first unveiled the 10% broad tariff, the markets reacted with relief, as many anticipated tougher measures. This positive sentiment pushed Bitcoin up to $88,000. However, as Trump announced additional tariffs with higher rates on major trading partners, concerns regarding inflation and economic instability sent risk assets tumbling, dragging Bitcoin down to $81,000.
As noted in a prior article, Bitcoin has shown relative strength compared to the stock market.
