Crypto markets crashed as Trump reaffirmed 100% tariffs on China, despite admitting they are “unsustainable.”
New U.S. tariffs on China sparked renewed global risk aversion, hitting crypto assets hard. On Friday, Oct. 17, Bitcoin fell 5%, adding to a 13% weekly loss. At the same time, the total crypto market cap fell 5.75%, while the top 20 crypto assets dropped about 5%.
The market downturn coincided with U.S. President Donald Trump’s latest comments justifying the 100% tariff on Chinese imports. While admitting that the additional 100% levy was unsustainable, he blamed China.
“It’s not sustainable, but that’s what the number is,” Trump said about the 100% tariffs on China. “They forced me to do that,” he said in a Friday interview.
Earlier, Trump expressed mild optimism regarding trade talks with China. He also confirmed he would meet with Chinese President Xi Jinping in two weeks during a conference in South Korea.
The escalation of the trade war, alongside further export controls on critical software, was a reaction to China’s expansion of export controls for rare earth minerals. These minerals are critical for U.S. industry, especially the tech sector. At the same time, China relies on imports of advanced microchips from U.S. ally Taiwan.
A 100% U.S. tariff on Chinese imports is a major disruptor of the global economy. Experts, including those at the Federal Reserve, expect significant negative impacts on economic growth, inflation, and employment.
For this reason, high-growth assets such as tech and crypto declined amid ongoing tensions. Meanwhile, gold reached its highest levels yet, trading at $4,250 per ounce.
