The global trade landscape faces renewed strain as Canada and China retaliate against the latest round of US tariffs, bringing the world’s largest economies closer to a full-scale trade war. The crypto market, already under pressure, reacted negatively to the developments, slipping 12% as investors reassessed risk exposure amid mounting economic uncertainty.
Canada Imposes 25% Tariffs on US Imports
In a sharp response to US trade policies, Canadian Prime Minister Justin Trudeau announced a 25% tariff on $20.8 billion worth of US imports, set to take effect on March 5. The countermeasures will remain until the US rolls back its own tariffs on Canadian goods. To minimize immediate disruptions, these duties will not apply to goods already in transit.
Trudeau’s announcement follows US President Donald Trump’s decision to enforce a 25% tariff on Canadian and Mexican goods, along with a 10% duty on Canadian energy products, after the expiration of a temporary reprieve. While additional countermeasures remain on the table, Trudeau has yet to provide specifics on further targets.
China Blacklists US Firms and Raises Tariffs
Meanwhile, China has implemented a two-pronged response to US tariff hikes. Import duties have increased by 10%-15% on a range of American agricultural and food products. Additionally, Beijing has blacklisted 25 US firms, citing national security concerns and placing them under investment and export restrictions.
#BREAKING: Starting March 10, 2025, #China will impose additional tariffs on select #US imports:
— Shanghai Daily (@shanghaidaily) March 4, 2025
15% on chicken, wheat, corn, and cotton.
10% on sorghum, soybeans, pork, beef, seafood, fruits, vegetables, and dairy.
Current tax exemptions remain unchanged, but these new… pic.twitter.com/PQFa0a6WIw
Unlike previous actions that targeted major consumer brands, this blacklist primarily affects defense contractors involved in US arms sales to Taiwan. The timing is significant, aligning with the latest 10% US tariff hike on Chinese goods, effectively raising the total tariff burden to 20% on certain exports. The White House has justified its actions as a response to China’s perceived failure to curb illicit drug flows into the US, further complicating trade negotiations.
Crypto Market Sinks Amid Trade War Jitters
Despite initial enthusiasm over Trump’s proposal for a US strategic crypto reserve, the crypto market took a sharp downturn. The sector’s total market capitalization fell by 12% on Tuesday, reflecting investor anxiety over escalating trade tensions. While Bitcoin and Ethereum led the decline, smaller altcoins suffered even greater losses as traders moved capital into defensive assets.
Also Read: Chainlink (LINK) Retraces After U.S. Crypto Reserve Pump – What’s Next for Investors?
With Canada’s tariffs in effect and China taking a more targeted approach, market participants are closely watching Washington’s next move. Trump has signaled the possibility of additional levies should trade partners resist US demands. Given crypto’s increasing correlation with macroeconomic trends, further uncertainty in global trade could continue to exert downward pressure on digital assets.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of CoinBrief.io. Before making any investment decisions, you should always conduct your own research. Coin Brief is not responsible for any financial losses.
