Tensions in trade relations between the US, the EU, and Canada could escalate, with President Trump warning of major tariff increases. How will this impact the markets and the crypto sector? Analysis and insights.
Despite relative market stability, the statement of Donald Trump has caused unease. The former president has warned of imposing “very large tariffs” on the European Union and Canada if they conspire to harm the American economy. This threat echoes his combative trade policy during his term.
If the European Union collaborates with Canada to economically harm the United States, large-scale tariffs, much higher than those currently planned, will be imposed on both to protect the best friend each of these two countries has ever had!” wrote the president on Truth Social and X.
However, the stock markets have held up well so far, with Bitcoin below the $88,000 mark and German DAX futures contracts down a modest 0.3%. This resilience is partly explained by recent statements from Federal Reserve Chair Jerome Powell, hinting that inflation pressures from tariffs could be transitory.
Beyond this apparent stability, an escalation of tariffs between the US, EU, and Canada could have significant economic consequences. Trade tensions could fuel inflation, disrupt supply chains, and undermine investor confidence. This includes the crypto sector, highly sensitive to macroeconomic fluctuations.
Recent history shows that Trump’s unilateral decisions on trade policy have had significant repercussions on financial assets, including cryptocurrencies. While investors seem to be keeping their cool for now, a new escalation of tensions could quickly erode confidence and fuel volatility.
Facing these geopolitical challenges, a coordinated and balanced response among the various parties seems more essential than ever. An overt trade war would harm everyone, including the United States. A middle path based on dialogue and seeking compromises would likely be better at preserving long-term economic and financial stability.
However, some analysts see this turmoil as an opportunity: a weakened dollar due to trade tensions could ultimately enhance the appeal of cryptos as safe-haven assets, boosting their adoption. To navigate this unstable climate, staying informed on economic news and the Trump administration’s decisions remains crucial to anticipate the next moves in the crypto market.
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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