Bitcoin fell 5% from its Thursday high after President Donald Trump accused China of violating the terms of a tariff truce from earlier this month.
Trump took to Truth Social on Friday to assert that China was breaking the rules of a deal in which the two nations agreed to roll back most tariffs on each other’s goods. Without sharing specifics about how China had allegedly reneged on its end of the bargain, Trump wrote on Truth Social, “China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US.”
Trump went on to hint that he would take action in response. “So much for being Mr. NICE GUY!,” he wrote.
The renewed tensions between China and the U.S. put pressure on crypto prices on Friday. Bitcoin has tumbled to a weekly low $103,900, after hitting an all-time high of $111,800 just eight days ago. The rest of the crypto market has tumbled as well. XRP is down 4% in the last 24 hours, Solana is down 6%, and Dogecoin is down 10%.
Trump struck a trade deal with China on May 12 in which the U.S. would drop tariffs on Chinese goods, from 145% to just 10%. Meanwhile, China would roll back its retaliatory tariffs on U.S. goods for 90 days while the countries continue to negotiate.
Bitcoin whipsawed earlier this week as a trade court ruled that most of Trump’s tariffs on U.S. trading partners were unconstitutional. That decision was quickly reversed by an appeals court that issued a stay on the lower court’s decision, temporarily reinstating the levies until the government has a chance to argue its case.
Trump’s tariff saga
Trump has made his on-again off-again tariff policy a trademark of his second term.
In February, the president introduced 25% tariffs on Mexico and Canada and a 10% tariff on China, accusing the nations of not doing enough to prevent illicit drugs and migrants from entering the U.S. Soon after, Trump paused the tariffs on Mexico and Canada for 30 days, initiating trade negotiations with the two nations. The aggressive policies and rhetoric put pressure on financial markets, leading the S&P 500 to lose 6% within Trump’s first few months in office.
The tariff saga hit a turning point on April 2 when Trump announced a plan to introduce “reciprocal” tariffs as high as 49% on nearly all U.S. trading partners and an additional 10% baseline levy. The plan sent investors running from risky assets like equities and crypto, pushing Bitcoin down 11% and the S&P 500 down 14% between April 2 and April 9, when the tariffs were expected to go into effect.
However, once again, Trump issued a pause—this time for 90 days—on most tariffs except those on China, which were raised to 145%, and the 10% baseline levy.
Since then, financial markets have rebounded significantly with Bitcoin achieving a new all time high and the S&P 500 climbing 14%. The president has struck a deal with the U.K. and other negotiations are ongoing.
This story was originally featured on Fortune.com
