Crypto Markets Surge as Trump Temporarily Halts Tariffs on Canada and Mexico
Both Canada and Mexico have committed to stricter measures to curb illegal drug trafficking and immigration into the United States following discussions with President Donald Trump.
The crypto market saw a strong rebound after Trump announced a temporary pause on proposed tariffs for Canada and Mexico while negotiations continue.
Tariff Pause Following Talks with Leaders
On Feb. 3, Canadian Prime Minister Justin Trudeau shared on X that after a call with Trump, the planned 25% tariffs would be put on hold for at least 30 days while both countries work toward a solution.
Trudeau emphasized that Canada would strengthen cooperation with the U.S. through a $1.3 billion border security plan, which includes appointing a Fentanyl czar, designating cartels as terrorist organizations, and reinforcing the U.S.-Canada border with additional personnel and helicopters.
Similarly, Mexico’s tariffs have been postponed for a month. President Claudia Sheinbaum stated on X that she and Trump had reached multiple agreements, including enhanced border security measures between the two nations.
“Our teams will immediately begin working on security and trade, and tariffs are paused for one month,” Sheinbaum confirmed.
Despite these agreements, Trump clarified in a Feb. 3 interview with Bloomberg TV that tariffs on Mexico are still on the table and could be implemented if necessary.
Source: Justin Trudeau
China’s Tariffs Remain Intact
While Canada and Mexico secured temporary relief, China remains subject to a 10% tariff imposed by Trump’s Feb. 1 executive order. A report from the Wall Street Journal suggests that China is open to negotiations, with officials proposing a revival of the Phase 1 trade deal from 2020, which committed Beijing to purchasing an additional $200 billion in U.S. exports over two years.
Crypto Prediction Markets Weigh In
Bettors on the crypto-based prediction platform Polymarket give Trump a 24% chance of fully removing tariffs on Mexico before March, while Canada has a 22% chance. China, however, is seen as having only a 9% probability of seeing its tariffs lifted next month.
Crypto Market Recovery
Cryptocurrency prices had tumbled on Feb. 3 following Trump’s tariff announcement, with estimates suggesting that up to $10 billion in capital was wiped from the markets.
However, after the tariff pause announcement, Bitcoin (BTC) surged past $100,000, hitting $101,731 after sinking to $92,000 the previous day, according to CoinMarketCap.
Meanwhile, Ether (ETH) also bounced back, climbing to $2,880 from a Feb. 2 low of $2,451.
The Crypto Fear & Greed Index, which gauges investor sentiment, shifted into the “Greed” zone with a score of 72, signaling renewed optimism in the market.
