By Major stock market indices opened the week down after President Donald Trump announced tariffs on Canada and China, while stating late Monday morning that duties against Mexico would be put on hold.
The Dow Jones Industrial Average pared early losses by noon to less than 100 points. The S&P 500 dropped 0.5%, while Nasdaq 100 lost 1%. The Russell 2000, which represents smaller firms, lost 0.7%. The Cboe Volatility Index, known as Wall Street’s “fear” gauge that anticipates major market swings, spiked above 17.
On Saturday, Trump announced 25% tariffs on all goods imported from Canada and Mexico — America’s two largest trade partners — with a carve-out of 10% levies on Canadian energy imports. He also announced a 10% levy on all goods coming from China. Late Sunday, Trump acknowledged there could be some “pain” for U.S. consumers as a result of the tariffs but said it would be “worth the price.” They were set to take effect Tuesday.
Shares in auto firms, many of which rely on production facilities in Mexico and Canada, saw significant declines: General Motors’ stock was down as much as 7%, while Ford was down as much as 4%.
Other major consumer firms selling off included Chipotle, Nike, Lululemon and alcohol distributor Constellation Brands.
Bitcoin and other cryptocurrencies — which remain tied to investor risk-taking behavior — also saw large drawdowns, though some analysts suggested it represented a buying opportunity.
Gold climbed to a record $2,818.27 per ounce.
Mexican goods that would likely get pricier to bring into the U.S. include fresh produce, beer, liquor and some electronics; from Canada: potatoes, grains, lumber and steel.
Some GOP officials said the tariffs represented negotiating tactics. Sen. Eric Schmitt, R-Mo., told “Meet the Press” moderator Kristen Welker, “I think these tariffs specifically, Kristen, are meant to bring Canada and Mexico to the table for the fentanyl that is streaming into our communities.”
He added: “The fact is these countries are taking advantage of us all along the while we’ve got fentanyl streaming into our country. So Mexico has a choice. They can choose to trade with the United States or continue to cozy up with the cartels. It’s pretty simple.”
