Bitcoin Drops as U.S.-China Trade Deal Excitement Fades Amid Lingering Doubts on Tariffs

Bitcoin Drops as U.S.-China Trade Deal Excitement Fades Amid Lingering Doubts on Tariffs

Bitcoin has fallen 1.7%, dropping to $101,806, as initial excitement surrounding a U.S.-China deal to temporarily reverse tariffs begins to dissipate. Despite early optimism, lingering doubts about the durability and effectiveness of the deal have led to a decline in the cryptocurrency’s value.

UBS Global Wealth Management strategist, Mark Haefele, in a recent report, warned that the current trade scenario could potentially lead to further instability in the markets. According to Haefele, the Trump administration is preparing to impose tariffs on critical sectors, including medicines, strategic minerals, timber, copper, and microchips. These tariffs are expected to be more enduring, with fewer carve-outs or exceptions for countries. The tariffs, especially those on strategic sectors, could have significant and lasting economic impacts.

Haefele added that the U.S. could raise its effective tariff rate by an additional 4 percentage points if these new duties are implemented at a 25% rate on the mentioned sectors. This uncertainty surrounding trade relations and its potential to further destabilize markets has contributed to Bitcoin’s price drop.

As the situation evolves, concerns about increased market volatility and the broader economic consequences of these tariffs continue to weigh heavily on investor sentiment.