Trump announces a 25% tariff on Japan and South Korea, Bitcoin responds with a drop.
U.S. President Trump announced two letters (Letter 1, Letter 2) on the Truth Social platform on Monday, declaring a 25% tariff on Japan and South Korea, reigniting market concerns over a trade war. Trump pointed out that trade between the U.S. and these two countries has always been unfair, leading to a trade deficit for the U.S. This tariff policy will take effect on August 1, delayed from the original deadline of July 9.
Affected by the tariff news, the price of Bitcoin dropped accordingly, falling from a high of $109,700 on Sunday to around $107,700, a 0.8% drop within 24 hours, briefly dipping below the psychological barrier of $108,000. (As of the time of writing, the price of Bitcoin is $107,522) This decline completely erased the modest gains made over the weekend, demonstrating the market's sensitive reaction to the uncertainty of trade policies.
In addition to Japan and South Korea, Trump also announced tariff plans for other countries in subsequent posts. Kazakhstan and Malaysia will face a 25% tariff, South Africa 30%, while Myanmar and Laos will face as high as 40%. Trump also threatened additional tariffs on countries aligned with BRICS group policies.
The crypto market is broadly weakening, with traditional markets falling in sync.
The decline in Bitcoin has weakened the entire cryptocurrency market, with Ethereum dropping 0.6%, and other smaller cryptocurrencies including Solana's $SOL, Dogecoin $DOGE, and Sui's $SUI falling by 1% to 2%. The only performer that stood out was $XRP, which rose over 2%.
This wave of tariff news not only impacts the crypto market, but also affects traditional financial markets. The Nasdaq index and S&P 500 index both fell about 1% on Monday, while the yield on 10-year U.S. Treasury bonds rose, approaching 4.4%.
Looking back at when the issue of Trump's tariffs first emerged in April this year, Bitcoin had plummeted to a low of $78,000, only to recover and set a new all-time high in May. Now, with tariff threats rising again, the market fears a repeat of the previous extreme volatility.
The White House confirms more countries will receive tariff notifications
White House Press Secretary Karoline Leavitt confirmed at a media briefing that about 12 other countries will directly receive notifications and letters from President Trump. She stated that the government is seeking to reach the best trade agreements for the American people and American workers.
The delay of the deadline brings a glimmer of hope to the market, suggesting that more trade agreements could still be reached before August 1. However, besides Japan and South Korea, the U.S. has yet to reach trade agreements with economic powerhouses like India and the EU, which also face high tariff risks. Market analysts warn that if tariffs escalate into a full-blown trade war, the cryptocurrency market could face greater downward pressure.
This article is co-transferred from: Crypto City
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