Trump Starts Trade War With Long-Threatened Tariffs, Triggering Crypto Crash

The crypto crash deepened after US President Donald Trump slapped swingeing trade tariffs on Mexico, Canada and China.

The crypto market crashed on Feb. 2 after US President Donald Trump slapped additional tariffs on imports from both Canada and Mexico.

The tariffs, which were announced late Feb. 1, come as part of a broader effort to “hold Mexico, Canada, and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into” the US, the statement said.

The crypto market slumped more than 10% overall in the past 24 hours, with market leaders Bitcoin (BTC) and Ethereum (ETH) both suffering heavy losses. Bitcoin plunged more than 6% to trade below the psychological $100K level at $94,035.62 as of 2:06 a.m. EST.

However, the largest altcoin by market cap, ETH, plummeted over 19% to trade at $2,498.05. The rest of the top 10 largest cryptos all suffered 24-hour losses as well.

Cardano (ADA) took the largest blow in the top 10 list after its price plummeted more than 23%. SPX6900 (SPX) was the biggest loser overall among major cryptos by market cap following its 28% implosion.

The meme coin sector plummeted 18.2% to a market cap of $75 billion, according to CoinGecko, with Dogwifhat (WIF) the biggest loser among the top 10 meme coins with a 26.6% loss.

Trump slapped a 25% additional tariff on imports from both Canada and Mexico, and a 10% additional tariff on China imports.

“These tariffs will remain in place until such time as Mexico, Canada, and China fully comply with their obligations under the immigration and drug trafficking statutes, respectively, and take effective and meaningful steps to substantially reduce the flow of illegal immigration, fentanyl, and other dangerous drugs into the United States,” the statement said.

pic.twitter.com/SWZtSm6NMX

— Donald J. Trump (@realDonaldTrump) February 1, 2025

Countries Retaliate Against New US Tariffs

It did not take long for the countries to retaliate.

Canada’s Prime Minister Justin Trudeau announced that he will also be imposing a 25% tariff on the $106.5 billion worth of US goods the country imports.

“We will always defend Canadian workers, farmers, and businesses. We’re announcing a dollar-for-dollar countermeasure on all imports from the United States, effective Friday, February 9 at 12:01 a.m. EST,” Trudeau said in a Feb. 2 statement.

China’s Ministry of Commerce said it will file a complaint with the World Trade Organization and will also be taking “corresponding countermeasures.”

“China strongly urges the United States to immediately correct its錯誤做法, and return to the path of multilateral trade cooperation,” the ministry said in a statement.

Similarly, Mexican President Claudia Sheinbaum said in a Feb. 2 post on X that she has told the Secretary of Economy to implement “tariff and non-tariff measures in defense of Mexico’s interest.”

“The government of Mexico will respond firmly to the tariff threat announced by the government of the United States,” Sheinbaum said.