Key Points
- President Trump announces a hike in tariffs on Canadian steel and aluminum, impacting Bitcoin and other markets.
- Trump threatens further tariffs and suggests Canada become the 51st state of the U.S. to eliminate tariffs.
President Trump recently startled Bitcoin and other financial markets with his announcement of a tariff increase on Canadian steel and aluminum from 25% to 50%. The reason cited was Ontario’s 25% tariff on U.S. electricity.
Tariff Increase Announcement
According to a post on Trump’s Truth Social, the new tariffs will come into effect on March 12. Trump also urged Canada to abolish their up to 390% dairy tariffs and hinted at escalated tariffs on Canadian automobiles by April 2.
In his statement, Trump condemned Canada’s longstanding tariffs on U.S. dairy products, which vary between 250% to 390%. He labeled these as “outrageous” and even threatened to proclaim a national emergency regarding electricity to counter what he termed as an “abusive threat” from Canada.
Additional Tariffs and Market Reaction
Furthermore, Trump warned that if Canada does not eradicate other “egregious” tariffs, the U.S. will significantly heighten tariffs on Canadian automobile imports from April 2. He claimed this move would effectively “shut down the automobile manufacturing business in Canada.”
Trump also suggested that “the only thing that makes sense is for Canada to become our cherished Fifty-First State. This would make all tariffs, and everything else, totally disappear.”
The markets reacted to this announcement. Bitcoin (BTC) fell 4.2%, dropping below $80,000 while The Dow Jones plunged nearly 600 points. Investors reacted to both the trade tensions and the administration’s statement that no new Bitcoin purchases were planned for the national strategic reserve.
Bitcoin has since bounced back to above $81,000.
This tariff dispute follows Trump’s tariffs on Canadian and Mexican goods. Both Canada and Mexico have resisted, citing trade agreement violations.