BTC Price Slides As Trump Announces 30% Tariff On The EU And Mexico

The Trump tariffs are again threatening to slow the BTC price’s bullish momentum. The flagship crypto sharply dropped following the president’s announcement of his trade letters to the EU and Mexico imposing 30% tariffs on goods from both regions.

BTC Price Drops As Trump Sends Trade Letters To EU And Mexico

CoinMarketCap data shows that Bitcoin has sharply dropped below $118,000 following Trump’s announcement of a 30% tariff on both the EU and Mexico. The flagship crypto had climbed to as high as $118,200 today but now looks likely to reach new daily lows following this announcement.

In a series of Truth Social posts, the president revealed trade letters that he sent to both regions, informing them of the 30% tariff on their products that will come into the US. These tariffs will take effect from August 1, just like the other tariffs that Trump recently imposed on other countries, sparking a bearish sentiment for the BTC price.

As CoinGape earlier reported, on July 7, Trump imposed 25% tariffs on South Korea and Japan. He also sent trade letters to 12 other countries on the same day, imposing double-digit tariff rates on these countries. The BTC price had dropped below $108,000 on the day.

However, interestingly, the flagship crypto recovered well and surged to a new all-time high (ATH) on July 9, breaking above $112,000 for the first time in history. Since then, Bitcoin has continued to climb and now boasts a current ATH of $118,800. The break above $112,000 came on the same day that Trump sent trade letters to Iraq, Moldova, the Philippines, Algeria, and Libya, imposing tariffs on exports from these countries.

However, the Trump tariffs remain a bearish factor for the BTC price, considering how this development could trigger a trade war between the US and these countries. The US president has already threatened to retaliate if any of these countries choose to further hike their tariff rates on US goods.

EU Responds To Trump’s Tariff Announcement

Following Trump’s announcement of the 30% tariff on EU goods, EU President von der Leyen released a statement, stating that they remain ready to continue working towards an agreement by August 1. However, she added that they will take necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required.

Mexico also stated that it is working towards reaching an agreement with the US before the August 1 deadline, which is also positive for the BTC price. Meanwhile, there is also the possibility of a ‘TACO trade’ being at play, which could explain why Bitcoin was still able to rally to new highs amid these recent developments.

The initial trade deadline was July 9, but Trump eventually extended it to August 1. TACO refers to “Trump Always Chickens Out,” a market term used by Wall Street experts to describe how prices initially drop due to fear of tariff announcements but recover because of the likelihood that the president won’t follow through on his threats.

The BTC price briefly dropped below $117,000 amid these developments, reaching a low of around $116,970. However, the leading crypto’s price has now rebounded and is now looking to reclaim the $118,000 level again.