- President Trump has imposed a steep 50% tariff on Indian imports as punishment for buying Russian oil
- The move caused India’s Rupee to plunge, strengthening the U.S. dollar and creating a crypto “liquidity crunch”
- Bitcoin fell 2.82% to below $110,000 as investors reassess the new geopolitical risk to the market
Bitcoin’s price falls below $110,000 as a new geopolitical event rattles the market and thereby economic stability. President Donald Trump has imposed a steep 50% tariff on most Indian imports, sparking a flight to the safety of the U.S. dollar that triggered the immediate volatility across the cryptocurrency market.
Why Did Trump Impose the India Tariffs?
The aggressive new India Tariffs are a direct punishment for the country’s continued purchase of discounted Russian oil. The Trump administration claims these purchases indirectly help fund the war in Ukraine.
With the latest move, Trump makes good on the threat to punish major economies patronizing Russia in what he considers an indirect way of helping fund the Ukraine war..
Before the latest tariff adjustments, the US activated a 25% tariff on Indian goods earlier this month. However, Trump’s latest announcement means that the US has doubled the rate following India’s oil transaction with Russia.
Related: Trump’s New 25% Tariff on India Sends the Crypto Market Down 4%
The new tariff is an exceptional case, despite Trump’s overall increase in tariffs since assuming office in January this year, resulting in strained relationships between the US and allies, as well as rivals, amid fears of rising inflation.
At a 50% tariff, Indian exporters join an exclusive group facing the highest duties on goods entering the US from overseas. Brazilian exporters are also facing a similar challenge in goods moving from the South American nation to the US.
The tariffs had an instant impact on currency markets. India’s Rupee (INR) plunged against the U.S. dollar, hitting a new all-time low. This strengthening of the dollar creates a “liquidity crunch” for risk-on assets like crypto, as investors sell off their holdings to move into less volatile assets.
Related: Donald Trump Says Reciprocal Tariffs Take Effect at Midnight, “Billions” to Flow
The move is also expected to disrupt global supply chains and has been sharply criticized by Indian officials.
How Has This Affected the Crypto Market?
The flight to safety has been swift. Bitcoin saw a 2.82% loss in under 24 hours, dropping below the key $110,000 level early Friday morning.
The broader crypto market followed, with top cryptocurrencies recording notable declines as investors reassess the new layer of geopolitical risk now facing the digital asset space.
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Source: https://coinedition.com/bitcoin-below-110k-after-trump-impose-india-tariffs-russian-oil/