Bitcoin has recovered above $79,000 after briefly falling toward $78,200 as President Donald Trump threatened 50% tariffs on Canadian vehicles, automotive parts and steel from Jan. 1, 2027.
Summary
- Trump said tariffs on several Canadian automotive and steel imports would rise to 50%.
- Bitcoin briefly fell toward $78,200 before recovering to about $79,300.
- U.S.-Canada trade negotiations ended without an agreement after three days of talks.
- U.S. spot Bitcoin ETFs drew about $1.92 billion during the latest five-session rally.
Trump tariffs target Canadian vehicles and steel
A Truth Social post published by Trump on Aug. 24 said the United States would raise tariffs on all Canadian cars, trucks, automotive parts and steel to 50% at the start of 2027.
“Build in the U.S. and there are ZERO TARIFFS,” Trump wrote before criticizing Canada’s approach to trade with the United States.
The announcement followed the collapse of negotiations between Washington and Ottawa on Aug. 21. According to Reuters, the proposed agreement would have reduced the main U.S. tariff on Canadian cars and light trucks from 25% to 15%. Duties on Canadian aluminum and steel would also have fallen from 50% to 25%.
Negotiators did not resolve several points, including whether tariff relief would cover medium- and heavy-duty trucks. With no agreement in place, Trump increased the pressure on Ottawa through his latest tariff threat.
Canada, for its part, plans to impose retaliatory tariffs on selected U.S. products from Sept. 8 in response to existing 50% U.S. duties on about $20 billion of Canadian goods. Prime Minister Mark Carney described the dispute as a trade war after the talks failed.
“You’re at war when you get attacked,” Carney said on Aug. 22.
Trump also claimed Canada conducts 95% of its business with the United States, although official trade figures cited by Reuters show Canada sends more than three-quarters of its goods exports to the U.S. and receives almost half of its goods imports from its southern neighbor.
U.S. goods and services trade with Canada totaled $872.3 billion in 2025, making the country one of America’s two largest trading partners. The high level of integration means parts can cross the border several times before a finished vehicle reaches a dealership.
Bitcoin price has recovered from its tariff-driven dip
Bitcoin initially moved lower after Trump published the tariff announcement, falling from above $79,000 to around $78,200. Buyers soon absorbed the decline, helping BTC return above the psychological $79,000 level.
At the time of writing, Bitcoin traded near $79,300, up more than 2% over the previous 24 hours. The cryptocurrency also came within roughly $500 of the $80,000 level after reaching an intraday high close to $79,900.
The limited reaction contrasts with Bitcoin’s behavior during earlier tariff disputes. In February, BTC lost the $65,000 support level as new U.S. global duties approached, while the total crypto market value fell as traders reduced exposure to risk assets. Earlier crypto.news coverage of that decline recorded a roughly 5% Bitcoin drop from a previous high of $66,465.
Monday’s price move has been smaller because Bitcoin entered the announcement with strong upward momentum. BTC climbed from about $62,679 on Aug. 17 to a three-month high near $79,500 on Aug. 21, adding almost 27% between the weekly low and high.
After pulling back toward $76,600 over the weekend, the asset resumed its advance on Aug. 24. The latest tariff news briefly interrupted that recovery but did not erase the day’s gain.
Treasury buybacks have supported Bitcoin’s rally
Behind Bitcoin’s recent advance, the U.S. Treasury has expanded its liquidity-support buybacks for longer-dated government securities. The department raised the maximum size of each operation from $2 billion to at least $4 billion for bonds in the 10-to-20-year and 20-to-30-year maturity ranges.
Scheduled to take effect on Sept. 9, the revised program will also increase the number of long-end operations from two to four per quarter through Nov. 4. No money has been deployed under the expanded schedule yet.
The announcement prompted a rapid repricing in the bond market. The 30-year Treasury yield fell from a 19-year high of about 5.34% to 5.19%, while the 10-year yield declined to around 4.65%.
As earlier buyback coverage detailed, Bitcoin jumped 8.2% from an intraday low near $64,100 to $69,500 in less than 12 hours after the Treasury disclosed the change. About $1.44 billion in short positions was liquidated across major crypto exchanges during the move, including $1.29 billion within one hour.
The buyback program does not amount to Federal Reserve quantitative easing. The Treasury purchases older and less liquid bonds using proceeds from newly issued debt, changing the composition of government liabilities without reducing the total federal debt stock.
Continued demand through regulated U.S. investment products has provided another source of buying. Spot Bitcoin exchange-traded funds attracted approximately $1.92 billion across five sessions during the latest rally.
On Aug. 20 alone, the funds recorded about $606 million in net inflows after drawing roughly $517 million during the previous session. BlackRock’s IBIT accounted for a large portion of the demand, while the combined assets held by U.S. spot Bitcoin ETFs rose above $90 billion.
Canadian tariffs carry risks for U.S. prices
For American consumers and investors, the proposed duties could affect vehicle prices and the earnings of automakers with supply chains spanning the U.S.-Canada border. Canadian plants supply engines, transmissions and other components to assembly facilities in the United States, while U.S.-made parts also move north for vehicle production.
Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association, told Reuters that U.S. assembly plants depend on specific Canadian components and could face production stoppages if the tariff threat disrupts their supply.
Auto industry executives also questioned whether the 50% rate would take effect as announced, noting that Trump has previously withdrawn or revised tariff threats during negotiations. More than four months remain before the planned Jan. 1 implementation date, leaving time for Washington and Ottawa to restart discussions.
Canada’s retaliatory measures are scheduled to begin sooner. Starting Sept. 8, Ottawa plans to apply duties to selected American products in response to tariffs already ordered by the Trump administration, while the White House has not released the detailed rules governing the proposed 2027 automotive levies.
