The stock markets started off down as Wall Street’s bell rang to start trading on Tuesday after President Donald Trump’s tariffs on the U.S.’s largest trading partners began.
The president’s highly anticipated 25 percent trade tariffs on Mexico and Canada took effect Tuesday, though it will be weeks if not months until the full impact is felt. Trump also added an extra 10 percent levies on China on top of the 10 percent he imposed last month.
Within the first 10 minutes of trading Tuesday, the Dow Jones Industrial Average dropped more than 136 points, or 0.31 percent, from Monday while the Nasdaq Composite sank 113 points, or 0.55 percent.
These dips come after sharp drops Monday. The Dow fell 2.5 percent compared to its peak near the start of the day while the Nasdaq fell by as much as 3.8 percent. American consumers and importers ultimately pay for tariffs, although Trump has insisted the contrary.
Despite the prospect of its negative effects on the market, Trump said in the White House Monday that there was “no room left for Mexico or for Canada.” He added: “The tariffs, they’re all set; they go into effect tomorrow.”
The president has previously stressed that the tariffs are the result of the influx of drugs, namely fentanyl, coming into the U.S. from its neighbors.
“Just so you understand, vast amounts of fentanyl have poured into our country from Mexico, and as you know also from China … it comes in from Canada, and it comes in from Mexico, and that’s a very important thing to say,” Trump continued.
Mexico already promised to retaliate with tariffs on U.S. goods. “There is no motive or reason, nor justification that supports this decision that will affect our people and our nations,” Mexico’s President Claudia Sheinbaum said Tuesday, the Associated Press first reported.
Canadian Prime Minister Justin Trudeau similarly announced retaliatory tariffs, saying in a statement “there is no justification for these actions” and vowed to not let these levies go “unanswered.”
The northern neighbor responded with 25 percent tariffs against $155 billion of American goods, Trudeau announced. “Our tariffs will remain in place until the U.S. trade action is withdrawn, and should U.S. tariffs not cease, we are in active and ongoing discussions with provinces and territories to pursue several non-tariff measures,” he said.
China has also vowed to fight to the “bitter end” of the tariff war and announced it would be imposing 15 percent levies on some U.S. goods.
Starting March 10, Beijing will impose a 15 percent tariff on imported chicken, wheat, corn and cotton, while a 10 percent tariff will be imposed on sorghum, soybean, pork, beef, aquatic products, fruits, vegetables and dairy products, according to a statement from the government.
