President Trump announced plans to impose a 25% tariff on the European Union during his first cabinet meeting on Wednesday. The market reacted negatively to the news, with Bitcoin’s price falling below $84,000, marking a drop of over 5% in the past 24 hours. The S&P 500 also hit its session low following the announcement, and the broader digital assets market index fell 2.3%.
“We have made a decision and we’ll be announcing it very soon. It’ll be 25 per cent,” Trump said. The tariff plans dampened recent optimism that the previous market sell-off may have reached its bottom.
This announcement comes after a period of market volatility, and Trump’s tariff plans appear to have added further uncertainty to the economic outlook. The market’s reaction suggests that investors are concerned about the potential impact of the tariffs on global trade and economic growth.
Trump’s tariff announcement impacts market
The European Union is a major trading partner of the United States, and the imposition of tariffs could lead to retaliatory measures from the EU. This could escalate trade tensions and further disrupt global supply chains, which have already been strained by the ongoing pandemic. The drop in Bitcoin’s price is particularly notable, as the cryptocurrency has been seen as a hedge against economic uncertainty by some investors.
However, the market’s reaction to Trump’s announcement suggests that even Bitcoin is not immune to the impact of geopolitical events. The broader digital assets market also experienced a decline, with the market index falling 2.3% on Wednesday. This suggests that the impact of Trump’s announcement was felt across the entire cryptocurrency market, not just Bitcoin.
It remains to be seen how the market will react in the coming days and weeks as more details about the tariffs emerge. However, the initial reaction suggests that investors are concerned about the potential impact on the global economy and are taking a cautious approach.