By Key Points:
- Trump pauses tariffs on Canada and Mexico for 30 days after negotiations.
- Canada is investing $1.3 billion in border security, while Mexico has agreed to reinforce its borders.
- Bitcoin recovered to $101,000, bouncing back from a sharp drop to $92,000 the day before.
- China’s tariffs remain in place, but reports suggest negotiations may be underway.
Crypto Market Rallies After
The crypto market has bounced back sharply after U.S. President Donald Trump temporarily halted tariffs on Canada and Mexico. The move came after negotiations with Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum, who agreed to step up border security and anti-drug trafficking efforts.
The tariffs, originally announced on Feb. 1, had sent markets into a tailspin. But following the latest developments, Bitcoin and Ethereum have regained lost ground, and overall investor sentiment has improved.
Why Did Trump Put the Tariffs on Hold?
In a Feb. 3 post on X, Trudeau confirmed that Canada will take new steps to strengthen security at the U.S.-Canada border, including:
- A $1.3 billion investment in border security measures
- Appointing a Fentanyl czar to target drug trafficking
- Designating cartels as terrorist organizations
- Deploying helicopters and additional personnel to reinforce border security
“We’re strengthening coordination with our American partners,” Trudeau said, confirming that the tariffs will be paused for at least 30 days while discussions continue.
Mexico Commits to Border Reinforcement
Sostuvimos una buena conversación con el presidente Trump con mucho respeto a nuestra relación y la soberanía; llegamos a una serie de acuerdos:
1.México reforzará la frontera norte con 10 mil elementos de la Guardia Nacional de forma inmediata, para evitar el tráfico de drogas…
— Claudia Sheinbaum Pardo (@Claudiashein) February 3, 2025
Mexico’s President Claudia Sheinbaum also announced new security commitments, confirming that tariffs have been suspended for a month.
- Increased land border security measures
- Ongoing negotiations with U.S. officials on trade and security policies
“We have reached a series of agreements. Tariffs are paused for one month,” Sheinbaum said in a statement on Feb. 3.
However, in an interview with Bloomberg TV, Trump made it clear that the tariffs could still be enforced if Canada and Mexico fail to follow through on their commitments.
President Trump says the US and Mexico have not agreed on tariffs and they could still go into effect. He says Mexico agreed to send 10,000 National Guard officers to guard the border and stem the flow of fentanyl. He says talks with Canada are ongoing https://t.co/wALUHcJRMC pic.twitter.com/mRPKp4PqIJ
— Bloomberg TV (@BloombergTV) February 3, 2025
China’s Tariffs Are Still in Place, But Talks May Be Coming
While Canada and Mexico managed to secure a temporary reprieve, China’s 10% tariff remains in place. However, reports suggest that Beijing is open to negotiations.
A Wall Street Journal report claims that China is considering reviving the 2020 Phase 1 trade deal, which required Beijing to increase U.S. imports by $200 billion over two years.
As of now, Trump has not indicated any plans to ease tariffs on China, keeping the pressure on the country’s exports.
Crypto Markets Bounce Back After Sharp Sell-Off
The initial tariff announcement sent the crypto market into a steep decline, with an estimated $10 billion wiped out in liquidations.
However, with the pause in tariffs, crypto prices have recovered:
- Bitcoin rebounded to $101,000, after hitting a low of $92,000 the day before.
- Ethereum climbed back to $2,880, recovering from a drop below $2,500.
Meanwhile, the Crypto Fear & Greed Index has moved back into “Greed” territory, reflecting renewed investor optimism.
Crypto Fear and Greed index score – Binance – Techtoken
What Happens Next?
Trump’s tariff decision could still change, especially if Canada and Mexico fail to meet their commitments. If tariffs are reinstated, the crypto market could see another wave of volatility.
At the same time, all eyes are on China, as any shift in trade policy could further impact global markets, including crypto.
For now, the market has stabilized, but with so much uncertainty, traders will be watching closely for the next big move.
What's your reaction?
