Trump Pauses Tariffs, Cryptocurrencies Soar

The crypto market is experiencing a spectacular rebound following U.S. President Donald Trump’s decision to temporarily suspend tariffs on Canada and Mexico. This announcement comes amid intensive negotiations between the United States and its North American neighbors concerning border security and trade.

A temporary suspension that eases the markets

On February 3rd, a series of phone calls between Donald Trump and the leaders of Canada and Mexico resulted in the suspension of a 25% tariff for a period of at least 30 days.

Canadian Prime Minister Justin Trudeau announced on X an ambitious border plan of $1.3 billion, which includes the appointment of a fentanyl czar and enhanced border surveillance.

On the Mexican side, President Claudia Sheinbaum confirmed the conclusion of similar agreements, emphasizing security and trade. However, in an interview with Bloomberg TV, Trump emphasized that tariffs could still come into effect, maintaining some pressure on ongoing negotiations.

China, also affected by a 10% tariff imposed on February 1st, has not yet benefited from a similar suspension. According to the Wall Street Journal, the Chinese government is ready to negotiate, notably proposing to reactivate the phase 1 trade agreement from 2020 that aimed at increasing purchases of U.S. exports by $200 billion over two years.

The crypto market reacts positively

The impact on the crypto market has been immediate and significant. After a major drop that led to the liquidation of around $10 billion in capital, Bitcoin regained strength, surpassing the symbolic threshold of $100,000 to reach $101,731, a remarkable rebound from its low of $92,000. Ethereum also experienced a strong recovery, rising from $2,451 to $2,880.

The Crypto Fear & Greed Index, which assesses market sentiment, has moved into greed territory with a score of 72 out of 100, compared to a previous position in fear territory (39). This shift reflects a radical change in investor perception following the easing of trade tensions.

The prediction platform Polymarket estimates the chances of a complete removal of tariffs before March at 24% for Mexico and 22% for Canada, while China would only have a 9% probability of seeing its tariffs lifted.

This rebound in the crypto market highlights the growing interconnection between international trade policy decisions and the behavior of digital assets, once again demonstrating the sector’s sensitivity to major geopolitical developments.

In summary, this dynamic illustrates the growing impact of trade policy decisions on the crypto market, highlighting its strong sensitivity to geopolitical tensions. Meanwhile, Europe is preparing a retaliatory plan against the taxes imposed by Trump.