Markets reacted negatively after Trump’s tariff retaliation, which renewed trade tensions, with major US indices closing sharply lower. The Dow Jones fell 1.4%, while the S&P 500 and Nasdaq dropped 1.75% and 2.6%, respectively, reflecting investor unease.
Canadian Prime Minister Justin Trudeau denounced the tariffs and warned of strong countermeasures to protect Canada’s economy. Foreign Minister Melanie Joly outlined a plan to impose tariffs on US imports of C$155 billion.
The first wave of $30 billion in duties will target everyday products. Joly described the tariffs as threatening Canada’s workforce, stating that thousands of jobs are on the line. China also vowed to retaliate, condemning the US move as an attempt to shift blame over fentanyl issues.
The Chinese commerce ministry urged Washington to revoke the tariffs and hinted at targeting US agricultural exports. Mexico joined China in opposing the new tariffs, raising concerns about expanding the trade war.
President Claudia Sheinbaum asserted that Mexico would not accept economic subjugation, emphasizing the need for mutual respect in trade negotiations. Trump defended the tariffs as necessary to curb illegal drug trafficking and protect US manufacturing.
He insisted that affected companies relocate production to the US to avoid additional costs. The administration previously delayed imposing tariffs on Canada and Mexico, but new levies on Chinese goods took effect in February, raising duties to at least 20%.
Trump also announced a 25% tariff on steel and aluminum imports, set to begin on March 12. He threatened reciprocal tariffs on individual countries and a 25% duty on European Union imports, further escalating trade tensions.
Diplomatic efforts have failed to prevent the tariffs, raising global economic uncertainty. Trump’s tariff retribution has sparked fears of a prolonged trade dispute with key trading partners.
