- With new trade tariffs by President Donald trump, prices dropped sharply in the market.
- Stocks and foreign currencies weakened as markets struggled with fears of inflation.
- Trump to hold a meet for addressing concerns impacting the digital asset market.
Global markets braced for turbulence on Monday after U.S. President Donald Trump imposed sweeping tariffs on Canada, Mexico, and China, fueling fears of economic disruption and inflation. In an official announcement, Trump stated that he had levied 25% on Mexican and Canadian goods, while China would be imposed 10% tariff. Further, energy-related Canadian goods would be levied 10%.
Trump stated that the tariffs would be in effective from Tuesday and were brought into force to curb the major threat of illegal aliens and deadly drugs killing the American citizens. Notably, the announcement not only affected the import trade but also the digital asset market, triggering massive liquidations and economic uncertainty.
In retaliation to the announcement, Canadian Prime Minister Justin Trudeau, stated that American goods coming into Canada would be charged 25% tax from Tuesday and another $125 billion worth of imports will be charged in three weeks time. This trade standoff has intensified concerns over economic growth and inflation, causing a severe downturn in global equities, foreign exchange markets, and crypto valuations.
Market Settlements and Currency Fluctuations
The announcement of tariffs sent shockwaves through financial markets, affecting traditional assets and digital currencies alike. Major U.S. stock indices faced immediate losses, while the Canadian dollar , Mexican peso , and Chinese yuan weakened. Analysts anticipate continued volatility as businesses react to potential supply chain disruptions and higher operational costs.
“It’s negative for CAD, MXN, and CNH, as well as overall risk,” said Nick Twidale, chief market researcher at ATFX Global iSydney. The outlook for these assets remains uncertain as traders assess the long-term economic impact of escalating tensions.
Meanwhile, in the cryptocurrency sector, Bitcoin dropped nearly 6%, while Ethereum plunged 27% to $2,135, marking its largest overnight decline since May 2021. The steep dip highlights the broad market pessimism driven by global economic instability.
Trump’s Trade Strategy and Crypto Market Repercussions
Trump’s use of tariffs to generate revenue, balance trade, and pressure foreign governments into negotiations is causing concern among economists, who warn it could worsen inflation and strain American businesses and consumers recovering from economic challenges.
The crypto market has been particularly reactive to these developments. Caroline Bowler, CEO of BTC Markets, underscored the widespread investor anxiety. The uncertainty surrounding worldwide trade relations and monetary policies has led crypto investors to reassess their positions, causing a ripple effect across distributed financial markets.
Related: Trump’s Tariff Announcement Triggers $2B Crypto Liquidation
Will Trump’s Proposed Meeting Calm Markets?
Amid the volatility, Trump has proposed a high-level meeting to review the tariffs, aiming to address market concerns and ease investor tensions. The crypto community remains hopeful that these discussions could lead to policy shifts promoting economic stability.
Analysts say de-escalating trade tensions could restore confidence and spark recoveries in both traditional and crypto markets. However, market instability may persist if negotiations fail or tensions escalate further.
