Trump announces new tariffs against Canada, striking a tough posture against its northern neighbor’s defiant attitude. Trump reiterated his call that the US annex Canada outright, thereby ending its independence.
Like previous announcements, this threat could be explosive for the crypto markets, but the tariffs may be priced in or not take effect. The more pertinent question is whether the US is about to enter a recession.
Trump Gets Tough on Canada Tariffs
President Trump’s planned tariffs have been wreaking havoc on the crypto market, and it looks like they aren’t done yet. At the beginning of February, Canada and Mexico managed to postpone them, significantly helping the crypto market. However, Trump is following through and is placing a new tariff on Canada:
“Based on Ontario, Canada, placing a 25% Tariff on ‘Electricity’ coming into the United States, I have instructed my Secretary of Commerce to add an ADDITIONAL 25% Tariff, to 50%, on all Steel and Aluminum coming into the US from Canada. This will go into effect tomorrow morning, March 12,” Trump claimed on social media.
Trump slightly edited the announcement after first posting it, clarifying that tariffs on Canada have a clear deadline. Trump also pointed to several other priorities in US-Canada relations: dairy sales, automobile manufacturing, military spending, and more. He finished with another call that the US should annex Canada outright.
This last demand, a complete end to Canada’s national autonomy, has been a particular sticking point in the tariff saga. After the US passed tariffs against China, the nation retaliated with a few tariffs of its own.
Canada also retaliated, and this tough posture created a fresh wave of support for its ruling party.
This popularity surge is especially important. It prompted harsher rhetoric on Canada’s part, and Trump has responded in kind. With his new offensive, the situation is escalating. It seems difficult to identify a clear off-ramp for both parties.
What does all of this mean for the crypto market? These tariffs have spelled a consistent bearish outcome for the industry, with markets declining alongside fresh announcements.
Additionally, crypto liquidations are already high, and Bitcoin’s price is not doing well. New tariffs against Canada could have a severe impact.
However, the market was already falling before Trump announced the new tariffs against Canada. The broader macroeconomic outlook is looking pretty bearish, and these tariffs may not change much on their own.
The crypto community will need to closely follow this situation when/if the tariffs go live tomorrow, and their effects will be more legible then.
Ultimately, “if” is the operant word there. Since Trump already balked from implementing tariffs against Canada and Mexico before, he may blink again.
However, that situation is creating a lot of market uncertainty, which could be much more dangerous than any tariff. If the market loses its confidence, that will definitely affect the crypto market.
The most important question is whether a full-blown recession will happen soon. These tariffs against Canada may or may not actually occur, and if they do, Trump may roll them back within 24 hours.
At this chaotic moment, it’s difficult to say whether any single policy could change everything.
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