Tariffs of 25% on Canada and Mexico, announced then delayed a month ago, that took effect overnight, hit stocks today in a broad-based selloff following a steep drop Monday. The Trump administration, at least so far, is not proving to be the boon many hoped for to inflation, interest rates or M&A.
The Dow Jones is down 729 points in late morning trade. The Nasdaq, S&P 500 and Russell 2000 are also drooping. Media and tech stocks, from Disney, Netflix and Fox to Snap, Roku, Amazon, Meta, Spotify, Live Nation and TKO, are in the red. Broadcasters are lower, most exhibitors are taking a hit. A few stocks clinging to gains include Warner Bros. Discovery, Comcast, Alphabet and Apple, which launched a more advanced iPad air today, but the situation is fluid.
President Trump also doubled his recent tariffs on China to 20%. He ran on trade policy well as immigration — and inflation — but market players have been blindsided by the speed and extent of the taxes on imports, which are paid by U.S. companies and consumers.
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All three countries — which are America’s top three U.S. trading partners — are retaliating. Mexico said it will announce countermeasures on Sunday. Canada imposed 25% tariffs on $30 billion worth of U.S. goods. Prime Minister Justin Trudeau said would expand to $125 billion in 21 days. He didn’t specify which goods but will be having a press conference this afternoon.
China announced new retaliatory tariffs on a range of food and agricultural products.
Companies like automakers, retailers and raw materials are likely to see the biggest direct hit to earnings, but the impact of higher prices will trickle through the economy.
“The economy appears to be gagging on the uncertainty created by the haphazard economic policymaking happening in DC,” said Moody’s chief economist Mark Zandi in a post on X today. “Lawmakers need to get it together soon, or the economy will go from gagging to choking.”
“Tariff wars, DOGE cuts to jobs and government programs and agencies, and deportations are sowing confusion, which puts a pall on investment, hiring and spending. Even the Fed says it has put interest rate policy on hold until it gets some clarity about where economic policy is going.”
Trump, who also suspended aid to Ukraine yesterday and softened policies towards Russia, is expected to make the case for his domestic and foreign agendas during a televised speech to Congress tonight. He has said the tariffs are to punish Canada and Mexico for fentanyl trafficking and immigration, and that they will nudge automakers and other companies to movie production to the U.S.
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