Stocks swooned at the open on steep tariffs set to start Tuesday but mostly reversed losses on late morning news that the hit on goods from Mexico will be delayed for one month.
It’s been a wild ride. On Saturday, President Donald Trump unveiled sweeping 25% tariffs on major trading partners Canada and Mexico and 10% on China, set to take effect overnight. He said he “absolutely” wants to slap tarrifs on Europe too. The Wall Street Journal’s conservative editorial board called it “the dumbest trade war in history” and it knocked the Dow Jones Industrial Average down by over 600 points today. But the DJIA has by now pretty much recovered — down 50 points — as markets see a possible reprieve.
Trump slammed the WSJ on Truth Social this weekend, calling it “always wrong” but acknowledged that tariffs may bring “some pain” in terms of higher prices – even though inflation was one reason he won the election. Media and entertainment companies aren’t seen as particularly impacted by tariffs, which are on goods, not services, unless, one analyst noted, other nations go for so-called asymmetrical retaliation. However, strapped consumers are not good for business.
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“WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!). BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID,” he wrote.
The auto industry was particularly concerned as a large number of cars (as well as parts) sold Stateside are made in Canada and Mexico.
Canada was infuriated and mystified with Prime Minister Justin Trudeau at a weekend news conference excoriating the move to punish a longtime friend and ally and announcing retaliatory tariffs.
Mexico’s President Claudia Scheinbaum said Saturday that the U.S.’ southern neighbor would do the same before a late morning pivot today delaying the tariffs on Mexico by one month amid ongoing negotiations.
A conversation with Trudeau this morning didn’t seem to go as well according to Trump’s Truth Social feed but he noted that he will be speaking with the Prime Minister again at 3 pm ET.
President Trump campaigned on tariffs, which he used in his first term as well. This threatened round was more aggressive. The Mexico delay, however, gave Wall Street hope that they may, in fact, prove to be more of a bargaining tool to gain concessions. Trump wrote that Scheinbaum had “agreed to immediately supply 10,000 Mexican Soldiers on the Border separating Mexico and the United States.” That said, market players would prefer not have this much market disruption too often.
Tech stocks, save Meta, are mostly lower. Disney, Netflix and Fox shares nosed higher. Warner Bros. Discovery is down 3%. A WSJ story today speculated that more writedowns may come when the WBD reports quarterly earnings later this month.
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