Bitcoin Falls Below $93K as US-EU Tariff War Escalates

U.S. President Donald Trump announced that he would impose a 10% tariff on all goods imported from eight European countries -Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland starting February 1. He plans to raise the tariff to 25% by June 1, 2026. These tariffs will stay in place until the U.S. secures a deal for the “complete and total purchase” of Greenland, an autonomous territory of Denmark.

This bold move comes after these countries opposed Trump’s renewed push to buy Greenland. Some even sent military contingents to the island in support of Denmark. Trump claims the tariffs are vital for U.S. national security, citing Arctic competition with Russia and China. However, critics quickly labeled the tactic as coercive blackmail against NATO allies.

Global and Market Response

The proposed tariffs threaten up to $1.2 trillion in annual U.S.-EU trade. Sectors such as agriculture, tech, and manufacturing could see disruptions. European leaders responded immediately. French President Emmanuel Macron and U.K. Prime Minister Keir Starmer condemned the tariffs as “unacceptable” and “completely wrong.” They warned of a “dangerous downward spiral” in U.S.-EU relations. Meanwhile, bipartisan U.S. lawmakers also criticized the plan for straining vital alliances.

In Denmark and Greenland, protests erupted. Citizens voiced strong opposition to any idea of U.S. ownership of the island.

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Europe’s Countermeasures in Progress

On January 18, the EU convened an emergency meeting of ambassadors. Leaders agreed to explore diplomacy but also started preparing countermeasures. A summit on January 22 will finalize strategy.

Possible responses include:

• €93 Billion in Tariffs: This “suspended retaliation list” could activate automatically by February 6. It targets U.S. exports like whiskey, motorcycles, digital services, and agriculture.
• Activation of the Anti-Coercion Instrument (ACI): Nicknamed the EU’s “trade bazooka,” this unused 2023 policy could limit U.S. firms’ access to the EU market, public tenders, and tech exports.
• Suspension of Trade Agreements: Leaders are considering suspending the 2025 U.S.-EU trade deal or applying harsher economic sanctions if tensions rise further.

The EU’s message is clear: it will defend its sovereignty and economic integrity. European Council President Antonio Costa affirmed the bloc’s readiness to act “against any form of coercion.”

Markets reacted swiftly. The euro and British pound weakened against the dollar, reflecting investor concern over increased volatility.

Crypto Feels the Heat as Bitcoin Drops Below $93K

These growing trade tensions are shaking the crypto market. Investors are now wary of rising inflation and uncertain Fed policy. As a result, Bitcoin (BTC) and other digital assets have come under pressure.

On January 13, BTC briefly dropped below $93,000. This followed two key events: the passage of the U.S. CLARITY Act (a controversial crypto regulation bill) and early tariff threats aimed at Canada, Mexico, and China. The fall marked a 6–10% dip from recent highs near $97,000. However, Bitcoin rebounded to trade around $95,000 as of January 18.

Short-term, analysts see more volatility ahead. If EU counter-tariffs activate, liquidity could sweep BTC below $90,000. Still, some view Bitcoin as a hedge. If Trump’s aggressive policies inflate the deficit or weaken the dollar, BTC could push above $100,000 long-term.

Stablecoin inflows and options trading have helped stabilize the market. But if tensions escalate into a full-blown trade war, expect broader corrections across altcoins like Ethereum and XRP.

What To Watch For Next

All eyes are now on the EU summit on January 22, where leaders will finalize their retaliatory strategy against Trump’s tariff threat.

If diplomacy stalls, expect the €93B counter-tariff package and Anti-Coercion Instrument (ACI) to move into action by early February.

This could spark a full-blown U.S.–EU trade war, rattling global markets and pushing Bitcoin into higher volatility zones. Additionally, any statements from the Federal Reserve, ECB, or crypto-heavy regions reacting to macro instability could shift narratives fast. Traders should monitor key dates: Feb 1 (tariffs begin), Feb 6 (EU retaliation deadline), and mid-Feb CPI/FOMC signals for added impact.