The U.S. stock markets have fallen after an early selloffs over fears of President Donald Trump’s new tariffs on Canada, Mexico and China.
Trump delivered on his threats to introduce trade tariffs on the nations in a move that has sparked panic across global financial markets.
The Dow Jones Industrial Average fell 557 points, and the Nasdaq composite dropped 2.1 percent. The S&P 500 sank 1.7 percent in early Monday trading following similar losses for markets across Asia and Europe.
Trump’s tariffs are set to come into force on Tuesday after the president signed a trio of executive orders.
There are fears that Trump’s tariffs will push up the price of groceries, electronics, and household bills for Americans as the president warned Americans might feel “some pain.”
The U.S. inflation rate has largely been slowing since its peak three summers ago, but stubbornly high or accelerating inflation could keep the Federal Reserve from cutting interest rates, which it began doing in September to give the U.S. economy a boost.
Everything from bitcoin to the Mexican peso fell, not just the stocks of U.S. companies expected to be the first to feel pain from Trump’s tariffs on goods imported from Canada, Mexico and China.
On Wall Street, some of the sharpest losses hit Big Tech and other companies that could be hit hardest by higher interest rates.
Trump claimed the measures are designed to stop the flow of drugs and immigrants from Canada and Mexico, which have been hit with 25 percent tariffs.
Chinese goods will also see a new 10 percent tariff placed on them, with Trump hinting more countries across the world could make the list in the near future.
Over the weekend, Mexico and Canada both announced retaliatory tariffs against the U.S.
Mexican president Claudia Sheinbaum said she was instructing her Secretary of the Economy to implement a “Plan B,” which includes “tariff and non-tariff measures in defense of Mexico’s interests.”
Canadian Prime Minister Justin Trudeau announced that Canada would impose 25 percent tariffs on $106.5 billion of U.S. goods.
On Monday, shortly before the U.S. markets opened, Trump said he had spoken to Trudeau.
“Canada doesn’t even allow U.S. Banks to open or do business there. What’s that all about?” Trump wrote on Truth Social.
“Many such things, but it’s also a DRUG WAR, and hundreds of thousands of people have died in the U.S. from drugs pouring through the Borders of Mexico and Canada. Just spoke to Justin Trudeau. Will be speaking to him again at 3:00 P.M.”