Bitcoin Drops 4% as Trump Announces 50% EU Tariffs

Bitcoin experienced a significant drop, plummeting over 4% from its recent all-time high of $111,900 to around $107,000. This decline coincided with the announcement by US President Donald Trump of potential tariffs on iPhones not manufactured in the USA and on EU-imported goods. The tariffs are part of a broader trade strategy aimed at addressing what Trump perceives as unfair trade practices by the EU.

Trump's announcement included a recommendation for a 50% tariff on EU products starting from June 1, 2025, with an exemption for products manufactured in the USA. He also specifically targeted Apple, stating that iPhones sold in the USA should be manufactured domestically. If Apple fails to comply, a 25% tariff would be imposed on the company.

Trump's statements highlighted several grievances against the EU, including trade barriers, VAT taxes, corporate penalties, non-monetary trade barriers, monetary manipulations, and lawsuits against American companies. He claimed that these issues have resulted in a significant trade deficit with the EU, which he finds unacceptable. The president expressed frustration with the lack of progress in trade discussions with the EU, leading to his recommendation for the tariffs.

The impact of Trump's announcement was not limited to Bitcoin. The S&P 500 and oil futures also saw declines, falling over 1.6% and 0.9%, respectively. Meanwhile, gold prices rose by 1.5%. These movements reflect the broader market reaction to the potential trade disruptions and the uncertainty they bring.

Bitcoin's price drop erased the gains made in recent days, as the cryptocurrency had been on a bullish run leading up to its all-time high. The decline in Bitcoin's price can be attributed to the increased market volatility and risk aversion triggered by Trump's tariff announcement. Investors, seeking safe-haven assets, turned to gold, leading to its price increase.

The potential tariffs on EU products and iPhones not made in the USA are part of a broader trade strategy aimed at addressing what Trump perceives as unfair trade practices by the EU. The announcement has led to increased market volatility and risk aversion, impacting not only Bitcoin but also other financial markets. The situation highlights the interconnected nature of global trade and its impact on financial markets, including cryptocurrencies.