Crypto Markets Tumble Amid Trump-Canada Trade Clash
Crypto Markets on Edge After Trump Halts Canada Trade Talks
U.S. President Donald Trump has abruptly suspended all trade negotiations with Canada in response to Canada’s new digital services tax targeting major American tech firms. He described the move as a direct attack on the U.S. economy and announced that retaliatory tariffs on Canadian goods would be imposed within a week.
Impact on Crypto Markets
Bitcoin declines sharply: Following the announcement, Bitcoin fell to an intraday low near $106,400, highlighting the sensitivity of digital assets to geopolitical developments.
Increased volatility: While the correlation between crypto and equities has been weakening in recent months, market participants remain on edge as broader macroeconomic tensions escalate.
Trade Tensions Escalate
Digital services tax dispute: Canada introduced a 3% tax on large technology companies including Apple, Google, Microsoft, and Meta, prompting a strong response from the White House.
Tariff threats: Trump warned that the U.S. will impose new tariffs on Canadian imports within days, significantly increasing the risk of a wider trade conflict.
Broader trade war context: This confrontation follows months of trade friction between the U.S., Canada, and Mexico, which has disrupted cross-border commerce and financial markets.
Why Crypto Reacted
Risk aversion: Escalating trade disputes often drive investors toward safer assets, causing sell-offs in equities and cryptocurrencies.
Liquidity concerns: Traders typically liquidate riskier positions such as crypto to cover potential losses and prepare for further volatility.
Bottom Line:
Trump’s decision to halt trade talks with Canada over the digital services tax has rattled global markets. Bitcoin’s drop underscores how swiftly geopolitical tensions can impact crypto valuations and investor sentiment.