Cryptocurrency prices have plunged after US President Donald Trump threatened to hit China with fresh 100% tariffs within weeks. America will also impose export restrictions on “any and all critical software” after the President accused Beijing of holding the world to ransom by announcing its own round of export controls.
The price of Bitcoin fell by more than 10% to below $110,000, before recovering to $113,096. The value of Ethereum slumped by 11.2% to $3,878. Cryptocurrencies BNB, Solana and XRP were down by 14.29%, 14.9% and 17.99% respectively.
Trump said the measures were because China was planning to impose “large scale export controls on virtually every product they make”. The US already imposes a 30% tariff on Chinese imports, meaning the new threat would take the total rate to 130%.
Analysts have warned that Beijing’s export rules have the potential to push the US into recession because of the massive threat to AI development, which has become the driving force of American economic growth. Trump added that he saw “no reason” to meet with President Xi Jinping at an upcoming APEC summit in South Korea.
Other analysts suggested the threat could be a negotiating tactic. Joe Brusuelas, chief economist at RSM US, said: “The Trump administration loves to start its next round of negotiation with seemingly extreme positions, only to quickly converge and cut a deal, it’s the whole point of being transactional.”
However, he added: “There is always a risk that the rhetoric chosen to bring the Chinese to the table could end up provoking Beijing, who then retaliate.”
