US President Donald Trump has announced an immediate 5 percentage-point increase in the global tariff rate, bringing the new rate to 15% from an initial 10%. Usually, the crypto market experiences a major sell-off following tariff announcements. Even so, the market remained unchanged despite the latest news.
The announcement, intended to address trade imbalances and boost US industry, immediately sparked uncertainty among investors about the broader economic outlook and ongoing legal and political battles.
Regarding the crypto market, reliable sources noted that Bitcoin’s price was roughly $68,000 and that Ether’s price remained relatively stable at the time the new tariff announcement was made public.
Reports noted that Trump opposed the Supreme Court’s decision that restricted his power to impose tariffs under the International Emergency Economic Powers Act (IEEPA).
To demonstrate the intense nature of the situation, the President shared a post on Truth Social noting that, “As President of the United States, I am raising the 10% global tariff on countries that have been taking advantage of the US for many years, without any consequences until my administration came along. This increase will go to a fully allowed and legally tested level of 15%.” He further stated that, “In the coming months, the Trump Administration will decide on and announce new tariffs that are legal.”
UK officials raise concerns regarding Trump’s recent tariff decision
Concerning Trump’s recent move, Britain’s largest business group swiftly raised concerns about his threatening tariff policy and advised the Government to maintain dialogues with officials in the United States to safeguard the UK’s competitive edge.
In a statement, William Bain, the head of Trade Policy at the British Chambers of Commerce ( BCC), stated that, “We were worried that the President’s backup plan could be more harmful for British businesses, and it seems that is indeed the case.” According to him, “This means an additional 5% increase in tariffs on many UK goods exported to the US, except those included in the Economic Prosperity Deal.”
Bain’s remarks sparked further tension among individuals when he pointed out that Trump’s decision would negatively affect trade, resulting in a decline in international economic growth and harming US consumers. Seeing these disadvantages, the UK official asserted that tariff hikes are a misguided approach. Meanwhile, he stressed that transparent and stable conditions are essential for firms on both sides of the Atlantic.
At this moment, sources revealed that the US president signed an executive order, with congressional approval, to impose a 10% import tax globally. Trump embraced this move just after his earlier reciprocal tariffs, implemented in April of last year under emergency powers, were deemed unlawful by the Supreme Court.
In the meantime, analysts are still weighing the potential economic consequences for the UK; nonetheless, officials in the country believe that Trump’s move will not have a substantial effect on most of Britain’s trade with America. Notably, this trade consisted of special steel, cars, and pharmaceuticals deals.
As for crypto markets, reports highlighted that the Total3 indicator, a market capitalization index that represents the combined value of all cryptocurrencies, excluding BTC and ETH, slipped less than 1% on Saturday, February 21, settling at around $713 billion.
Crypto markets encountered a substantial decline amid Trump’s tariff hikes
Concerning the recent market behavior triggered by the US president’s tariff decision, analysts conducted research. They found that the price movements of Bitcoin and Ethereum followed a week of heavy investor outflows from significant US exchange-traded funds.
To support this claim, sources disclosed that investors in the US pulled out almost $316 million from Bitcoin funds, with only Friday, February 20, showing positive market activity. On the other hand, Ethereum funds saw a major decline, exceeding $123 million.
Some key players in the industry that implemented substantial withdrawals from these funds include BlackRock, Fidelity, and Grayscale. Analysts argued that these firms typically make this decision when cryptocurrency prices are declining. Over the past week, Bitcoin and Ethereum saw a downward trend, losing 2% and 5%, respectively.
Nonetheless, despite the ongoing withdrawals, reports from SoSoValue stressed that the funds maintain a substantial presence: Net inflows reached nearly $54 billion, bringing total net assets to $85.3 billion.
