The cryptocurrency market experienced the adverse consequences of Trump’s tariffs against essentially every other country in April, or at least the threat, resulting in massive price declines to multi-month lows.
Although the POTUS has continued to impose such taxation on some nations while reducing the rates for others, more controversy arose on Friday when the US Court of Appeals ruled that the tariffs are illegal.
Illegal Tariffs?
The strike against Trump’s tariffs could be particularly painful for his presidency, given their significance in his foreign policy. After all, the 47th US President has threatened every country, including many allies, with imposing some sort of taxation if they fail to give in on his trade demands.
Despite the controversy surrounding the tariffs, there’s a strong argument that Trump has emerged as a winner in negotiations with most country leaders.
However, the US appeals court ruled on Friday that most “reciprocal” tariffs are illegal. Some of the nations that were hit with such were China, Mexico, and Canada.
The court, in a 7-4 decision, rejected Trump’s argument that the tariffs were permitted under the Emergency Economic Powers Act. Instead, the ruling called them “invalid as contrary to law.”
The POTUS was quick to respond, posting on this social media platform that “all tariffs are still in effect,” adding that the court’s ruling was “incorrect.”
Impact on Bitcoin and Crypto?
Aside from the ruling itself, the timing was also quite controversial. It came out just 30 minutes after the futures markets closed on Friday, and Wall Street will not open until Tuesday due to the national holiday on Monday.
While this may have spared Wall Street from extreme volatility, the cryptocurrency market is always open. It doesn’t close on weekends or on holidays. Moreover, investors tend to overreact and engage in extreme panic selling when the crypto market is open and such impactful news goes live.
However, this hasn’t been precisely the case so far. BTC is indeed in the red on a weekly scale, but that transpired even before the court’s ruling. Nevertheless, there could be a long-term impact on the asset class.
Most experts tend to believe that if the court’s ruling is valid and there’s less global economic pressure from fewer tariffs, then riskier assets like bitcoin and the altcoins could benefit. Reduced tariffs typically stimulate economic recovery and higher liquidity, which could mean price strength for BTC.
Unlike many companies that could be directly taxed through Trump’s tariffs, bitcoin is exempt, so the ruling shouldn’t affect its fundamentals as an asset class on its own.
