According to Claudia Sheinbaum and Donald Trump, tariffs between the US and Mexico are paused for one month. This has already triggered a rebound for the crypto market, particularly XRP.
However, Canadian Prime Minister Justin Trudeau is retaliating harshly to US tariff efforts. His country is much more entangled with crypto markets than Mexico, presenting a real wild card.
US and Mexico Reach Agreement
Proposed tariffs between the US and Mexico have been wreaking havoc in the crypto market. US tech stocks were already reeling from DeepSeek, but new tariffs against Mexico, Canada, and China have caused billions in crypto liquidations.
XRP, which rallied over 300% since Trump’s election victory, dropped by over 25% over the weekend after the US president indirectly imposed a global trade war. Ripple’s altcoin slumped to $2.01 on Monday morning, its lowest in over a month.
Nonetheless, Mexican President Claudia Sheinbaum has reached an agreement with Donald Trump to postpone the process.
“We had a good conversation with President Trump with great respect for our relationship and sovereignty; we reached a series of agreements. Our teams will begin working today on two fronts: security and trade. Tariffs will be paused for one month from now,” Sheinbaum claimed via social media.
Sheinbaum claimed that her government would direct the National Guard to police the drug trade in the US. Trump concurred, announcing the deal.
Now that these new tariffs have apparently been halted, the markets have started to recover. In particular, the value of Ripple’s XRP token jumped up 6%.
Overall, XRP has regained the majority of its losses from earlier today. In fact, most of the ‘made in USA‘ cryptocurrencies, such as Cardano, Chainlink, and Hedera, have recovered significantly following the agreement.
Going forward, it seems that these assets will be highly driven by the political decisions and economic policies of the US.
Politics and Macroeconomic Factors Continue to Influence the Crypto Market
This development validates the predictions that tariffs would present a buying opportunity in crypto. Mexico and the US are significant trading partners, and Trump’s bluster has turned into a mutually beneficial trade deal.
The markets are sighing in relief, but there’s still a fly in the ointment: a lack of progress with Canada.
Unlike his counterpart in Mexico, Canadian Prime Minister Justin Trudeau has proved unyielding about US tariffs. He denounced these actions in a major speech, and Canada is preparing to retaliate with a trade war offensive of its own.
Tariffs against China are also apparently intact, but the country’s response is far more muted.
Canada, compared to Mexico, is substantially more entangled with the US crypto market. BlackRock launched a Bitcoin ETF in Canada, and 40% of the country’s institutional investors hold crypto.
The markets have been rebounding from one set of tariffs, but Canadian defiance may play an outsized role in this industry.
Ultimately, however, this situation is far too chaotic to predict accurately. Sheinbaum fervently denounced US tariffs against Mexico yesterday but shocked the markets with a successful deal this morning.
Trump and Trudeau may reach their own reconciliation agreement, which could have any number of impacts on the crypto market. Regardless, it’s evident that we’re in a new era of chaotic price moves.
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