Trump’s Trade War Escalates with 25% Japan-Korea Tariffs, Bitcoin Feels the Heat

• Trump imposed 25% tariffs on Japan and South Korea starting August 1. 

• Bitcoin dropped below $108,000 and remains under pressure from the trade tensions. 

• More tariff letters are expected for other countries before the July 9 deadline.

President Donald Trump announced 25% tariffs on goods from Japan and South Korea, effective August 1, 2025. The announcement came through posts on Truth Social, where Trump emphasized unfair trade practices. US stocks fell Monday following the tariff announcement, with Wall Street’s main indexes declining.

The tariff decision comes ahead of the July 9 trade deadline that Trump had previously established. The United States is close to finalizing several trade pacts in the coming days and will notify other countries of higher tariff rates by July 9. The newly announced tariff rates will put them at or near where Trump set those countries’ rates on April 2, when South Korea’s rate was 25% and Japan’s was 24%.

Bitcoin Price Struggles Near $108,000 Level

Bitcoin’s price has stalled near $108,000 after rejecting the $110,800–$111,000 supply zone, where multiple failed breakouts occurred. The transfer of 80,000 BTC from ancient wallets erased about 1.6 percent from Bitcoin’s price, knocking it briefly below the psychologically important $108,000 level. Market analysts express concern about cryptocurrency’s vulnerability to geopolitical tensions and trade policy announcements.

The flagship cryptocurrency remains under pressure as investors assess the broader implications of escalating trade tensions. July is shaping up to be a potentially volatile month for bitcoin, driven by the Trump administration’s policies. Technical indicators suggest Bitcoin faces resistance at current levels, with traders monitoring key support zones.

Broader Market Implications and Trade War Risks

The White House says 12 more tariff letters are expected, indicating potential expansion of trade restrictions to additional countries. Major economies, including India and the European Union, remain without finalized trade agreements with the United States. Trump has previously threatened tariffs as high as 70% on countries that fail to reach trade deals by the established deadline.

The market reaction reflects growing concerns about a potential trade war between the US and its key trading partners. Trump warned that any retaliation would be met with a US response, escalating tensions with crucial Asian allies. Currency markets also responded to the announcement, with the South Korean won tumbling and the Japanese yen slipping against the dollar.

Financial markets continue to price in the uncertainty surrounding trade policy developments. The combination of tariff announcements and cryptocurrency volatility highlights the interconnected nature of global markets in responding to policy changes. Investors remain cautious as they await further developments in trade negotiations and their potential impact on asset prices.