Trump tariffs returned to the market spotlight on Monday after President Donald Trump threatened 50% duties on Canadian vehicles, automotive parts, and steel from Jan. 1, 2027. Bitcoin briefly traded near $79,000 before rebounding toward $80,000. BTC traded around $78,800 at the time of writing, up about 2%. The recovery placed the cryptocurrency within reach of the psychological $80,000 level despite renewed trade uncertainty.

The latest Trump tariffs would cover Canadian cars, trucks, automotive parts, and steel. In a post on Truth Social, the president urged manufacturers to build inside the United States to avoid the duties.

Why Have Trump Tariffs Escalated Against Canada?

The warning came after failed negotiations between Washington and Ottawa regarding Friday trade talks. The proposed deal was intended to cut tariffs in the U.S. on Canadian cars and light trucks from 25% to 15%, while duties on steel and aluminum would have been reduced from 50% to 25%. The threatened 50% rate would double the existing 25% duty on Canadian cars and light trucks.

As per Reuters, the talks ended over disagreements about how much relief would be extended to medium- and heavy-duty trucks.

Canada's retaliation would involve the application of dollar-for-dollar countertariffs on certain U.S. products from Sept. 8. According to Canadian Prime Minister Mark Carney, the U.S. tariff was an act of aggression, and he declared the situation a trade war.

Trump claimed that Canada conducts 95% of its business with the United States. However, Reuters reported that more than three-quarters of Canadian goods exports go to the U.S., while nearly half of its goods imports come from its southern neighbor.

The close integration of the North American automotive industry can affect both nations. As per Canada's Automotive Parts Manufacturers' Association, U.S. assembling plants rely on Canadian parts and may face production disruption. That supply-chain exposure makes developments in tariff talks relevant not only for vehicle makers but also for metals, parts suppliers, and cross-border manufacturing flows.

The president's second-term trade policy continues to revolve around the tariffs imposed by Trump. In July, the Trump administration imposed tariffs of 10% and 12.5% on goods from 60 trading nations, with some exceptions.

Why Did Bitcoin Recover Toward $79,000?

Bitcoin was near the $78,200 level in connection with Trump's statement before the rally. The correlation suggests that the cryptocurrency is sensitive to news about trade issues, but there is no evidence that tariffs were the cause of the fall.

Another factor was the assumption that Treasury Department officials would be able to make bond buybacks using the department's General Account, worth almost $1 trillion. However, neither the amount nor the schedule of buybacks has been determined yet.

Previously, the U.S. Treasury Department raised the maximum volume of long-term buyback operations of liquidity support from $2 billion to at least $4 billion, according to a Treasury press release. The buybacks will last from September 9 to November 4.

The bond buybacks may help improve liquidity and lessen the pressure on longer-term yields. This situation may contribute to the performance of risky assets, but the bond buybacks do not create demand for Bitcoin directly.

However, in an X post, Daan Crypto Trades stated that Bitcoin outperformed most of the cryptocurrencies in the top 50 amid the recent rally, despite the strong performance of altcoins. According to him, increased dominance of Bitcoin is usually a characteristic of the market breakout. Daan believes that Bitcoin leads and then strong alts follow. On the other hand, the rise in smaller and risky tokens may indicate that the local top is coming.