Bitcoin Back Above $109,000 After Trump Pauses Tariffs on European Imports Until July

The price of Bitcoin (BTC) climbed back to $109,000 late on Sunday after US President Donald Trump announced that his administration would delay the proposed 50% tariff on imported goods from the European Union until July 9. The move has offered a much-needed reprieve for global financial markets from ongoing trade tensions involving the US and its closest allies.

Following the news, US equity futures began edging higher, with the S&P 500 futures rising 0.9%, Dow futures adding 0.8%, and the Nasdaq-100 futures gaining 1%. This reflected the overall market optimism that the delay could ease the trade tensions between the transatlantic trading partners, at least for the time being.

Trump Extends EU Tariff Deadline Until July 9, Giving the Bloc Time to Reach a Deal

The decision to extend the tariff deadline came following a call between Trump and the European Commission President, Ursula von der Leyen, during which the bloc requested more time to finalize a trade agreement with the US.

On Friday, Trump unexpectedly threatened to impose a 50% tariff on EU imports starting June 1, writing in a Truth Social post that he felt like discussions with the bloc were “going nowhere”. He cited a host of trade irritants imposed by Europe on exports, such as value-added taxes (VATs), fines, and “unfair” regulations on US companies.

Following the announcement, Bitcoin dropped below $107,000, suffering a 2% decline in less than 24 hours. The apex cryptocurrency also experienced a major setback in April when the White House imposed a 20% tariff on most EU imports, only to reduce it to the baseline 10% tariff later to allow time for discussions.

The US President has long maligned the EU, arguing that it was formed solely to take advantage of the US, and decried the $250 million a year trade deficit with the continent. Meanwhile, the EU says it would not negotiate over certain demands put forward by Trump, such as VATs. Some European leaders said they wouldn’t accept a US-EU trade deal that keeps Trump’s proposed 10% baseline tariff in place, pointing to the concession the UK made in a deal signed earlier this month.

US Trade Representative Report Points out Persistent EU Tariff and Non-Tariff Barriers for American Goods

While the United States and the EU share the largest bilateral economic relationship in the world, a recent Foreign Trade Barriers report by the US Trade Representative (USTR) states that American goods face persistent tariff and non-tariff barriers in European markets.

Although the average tariff of the EU’s Most Favored Nation stand at a relatively low 5%, certain US exports face disproportionately high levies, such as fish and seafood (26%), trucks (22%), bicycles (14%), passenger vehicles (10%), and fertilizers and plastics (6.5%).

Many processed foods, such as confectionery products and baked goods, are also charged high tariffs under the EU’s Meursing Table System, which calculates duties on the products based on their composition of milk fat, protein, starch, and sugar. The USTR report highlights that this system increases administrative burden and creates uncertainty for US food exporters.

To further complicate things for the US, the bloc does not administer its laws through a single customs administration, presenting an added layer of complexity for exporters. Each EU member state implements independent customs laws, resulting in different interpretations and enforcement throughout the continent.

Trump’s latest statements give the EU just over a month to reach an agreement and clear the pathway for US exports. However, the market sentiment appears to be in favor of those betting on a favorable outcome to Washington’s trade policy.

Also Read: Bitcoin Bulls Confident in Securing $110K and New ATH Before Options Expiry

Experts Suggest Rising Institutional Demand Could Result in Bitcoin Targeting $120,000 in Coming Months

Speaking to crypto media outlet Decrypt, Ryan McMilin, chief investment officer at crypto fund manager Merkle Tree Capital, said that lately, Bitcoin has been trading in line with gold, reflecting the precious metal’s appeal as a non-sovereign asset and inflation hedge. He also noted that surging global M2 money supply over recent months has led to gold breaking its all-time highs, and now Bitcoin is following suit. McMilin says this trend could continue over the coming months, and expects the “digital gold” to aim for $120,000 and beyond.

The Merkle Tree Capital CIO anticipates the ongoing tariff discussions to cause a “few bumps along the way”, but the markets could see some more trade deals announced in the coming weeks.

Pav Hundal, lead market analyst at crypto exchange Swyftx, also shared the sentiment. He told Decypt in a statement that it was not going to be easy to separate market signals from the noise created by the trade war, and short-term positions “might shuffle”. He claimed that options traders are eyeing a $120,000 BTC, pointing to the $500 million-plus in notional volume sitting at the price level on futures contracts expiring end-of-June on the cryptocurrency derivatives exchange Derebit.

Singapore-based QCP Capital wrote in an investor note on Friday that the current crypto market rally is more structurally sound than previous cycles, which were primarily driven by retail interest, due to a “more accommodating” US regulatory environment, persistent institutional inflows into Bitcoin and Ethereum ETFs, and direct spot allocations fostering “structural demand”.

At the time of writing, Bitcoin (BTC) is trading at $109,612 – up 1.39% in the last 24 hours.