Risk Assets Under Pressure Due to Trump’s Tariff Warning

Risk assets including Bitcoin (BTC), XRP (XRP), and Solana (SOL) are regaining attention after President Donald Trump cautioned against reciprocal tariffs aimed at countries considered to be causing “economic harm” to the U.S.

> “If the European Union works with Canada to do economic harm to the USA,” Trump remarked in a Truth Social post during Asian hours on Thursday, “large scale tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!”

Trump also mentioned, “Liberation day in America is coming, soon. For years we have been ripped off by virtually every country in the world, both friend and foe. But those days are over — America first!!!”

This announcement comes shortly after reports suggested that fear of tariffs may have been exaggerated, with any anticipated impact expected to be more measured.

Earlier this month, Trump enacted a 25% tariff on imports from Canada and Mexico, alongside a 20% tax on Chinese goods, citing national security concerns around immigration and fentanyl trafficking. Now, with the EU and Canada in the spotlight, market participants may be bracing for additional market volatility.

Tariffs generally disrupt economic stability by increasing costs of imported goods, fueling inflation, and pressuring central banks like the Federal Reserve to tighten monetary policies. This environment may pose challenges for BTC and other cryptocurrencies in the near term, as the crypto market frequently mirrors equities, which tend to decline amid trade uncertainties. Furthermore, a stronger U.S. dollar, bolstered by capital flows driven by tariffs, could further diminish BTC prices as investors seek out safer assets like gold or cash.

Trump’s post negatively impacted the formerly bullish sentiment in Asian markets, leading to a brief sell-off. XRP and SOL experienced a 2% drop, while Ether (ETH) and BNB Chain’s BNB remained stable, and Dogecoin (DOGE) relinquished gains resulting from a 3.5% increase over the past 24 hours.

Sui Shines, Analysts Remain Optimistic

Outside the top ten tokens by market cap, Sui Network’s SUI surged by 7% as it prepares for the Walrus Network, a data availability protocol on Sui, to go live on the mainnet later Thursday.

Some analysts suggest that developments in Asia might act as a catalyst for Bitcoin prices amidst challenges originating in the U.S.

“While U.S. regulators are beginning to lift restrictive policies, institutions in Asia are gaining attention by launching new funds, products, and innovations encouraged by pro-crypto regulations in significant regions,” said Jupiter Zheng, partner at HashKey Capital, in a Telegram message to CoinDesk.

Zheng added, “The next leg of the bull market may find its footing in Asia as the center for growth in the industry.”

BTSE’s Jeff Mei shared a more positive outlook on Thursday.

“Bitcoin and other cryptocurrencies have rebounded in the past few days, even with stock markets declining in response to President Trump’s auto tariffs announcement. This indicates that the worst may be over for crypto markets this year, suggesting the possibility of a price increase as inflation concerns in the U.S. decrease and we approach potential rate cuts,” Mei said in a Telegram message.

Traders are looking ahead to the upcoming Personal Consumption Expenditure (PCE) data release on March 28, which can significantly impact Fed interest rate decisions.