Bitcoin took a sharp turn downward early Tuesday morning, dipping below $113,000, after former U.S. President Donald Trump revealed plans to impose new tariffs on pharmaceuticals and microchips. In an interview with CNBC, Trump confirmed that his administration would announce the new taxes “within the next week or so,” sparking unease across both traditional and crypto financial markets.
The cryptocurrency market reacted swiftly to the news, falling 1.82% in total market capitalization. Bitcoin (BTC), the flagship digital asset, was among the hardest hit, briefly breaking below the $113,000 support level. Major U.S. stock indices also suffered mild losses: the S&P 500 dropped 0.28%, the Nasdaq fell 0.36%, and the Dow slipped by 0.03%.
According to Trump, the new tariffs will begin with a relatively “small” tax on pharmaceutical products but are expected to ramp up significantly, reaching as high as 250% over the coming years. The move aims to encourage domestic manufacturing, particularly in sectors critical to national infrastructure, such as healthcare and technology.
“We’ll be announcing tariffs within the next week or so,” Trump told CNBC. “We’ll be announcing on microchips and chips, which are a different kind, because we want them made in the United States.”
The announcement rattled global investors, many of whom had hoped for a more measured approach to international trade amid lingering concerns about inflation and economic stability. Trump’s policies mark a sharp divergence from what many economists had predicted—a more balanced trade framework aimed at stabilizing inflation and preserving employment.
The shock was intensified by last Friday’s disappointing jobs report, which reignited fears of an economic downturn. Analysts say that steep tariffs on key industries could place additional pressure on both supply chains and consumer prices, at a time when the U.S. economy is still navigating post-pandemic recovery hurdles.
Cryptocurrency markets, known for their sensitivity to macroeconomic shifts and regulatory uncertainty, were among the first to respond. Bitcoin’s retreat below $113K is being viewed as a sign of investor caution, as participants brace for a period of policy-driven volatility.
Industry experts warn that such economic maneuvers—particularly those involving tariffs—often lead to unpredictable ripple effects. While they may boost certain domestic industries in the long term, the short-term consequences could include rising production costs, strained global trade relations, and reactive sell-offs in equity and crypto markets alike.
“Tariffs may sound patriotic, but their effect on investor confidence and global trade stability can be devastating if not handled carefully,” said a senior analyst at a New York-based investment firm. “Crypto is particularly vulnerable to sudden shifts in macroeconomic sentiment.”
As of now, Bitcoin continues to hover near the $113,000 mark, with traders watching closely for any follow-up statements from Trump or further signs of policy escalation. The broader crypto community remains cautious, unsure whether the downturn will stabilize or worsen as geopolitical and economic narratives continue to evolve.
Conclusion:
Trump’s surprise announcement has once again proven how interconnected politics and crypto markets have become. With rising uncertainty surrounding U.S. trade policies and the potential for escalating tariffs, Bitcoin and other cryptocurrencies may continue to experience heightened volatility in the days to come. Investors are advised to remain alert and prepared for rapid market changes as the situation unfolds.
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