The stock market plummeted after President Donald Trump confirmed tariffs on Canada and Mexico would go into effect at midnight.
The Dow Jones Industrial Index lost 2.1 percent, the S&P 500 fell 2.3 percent and the tech-heavy Nasdaq was down 3.2 percent in afternoon trading.
Speaking from the White House alongside Commerce Secretary Howard Lutnick, Trump confirmed 25 percent tariffs on America’s largest trading partners would start on Tuesday.
This dashed investors’ hopes of a possible last-minute deal to avoid the full tariffs.
‘Tomorrow, tariffs – 25 percent on Canada and 25 percent on Mexico,’ Trump said during a press conference. ‘And that’ll start. … What they have to do is build their car plants, frankly, and other things in the United States, in which case they have no tariffs.’
Following Trump’s comments, Wall Street’s fear gauge – which is known as the VIX – soared to its highest point this year so far.
‘Whether the stock market can survive this change remains to be seen,’ Chris Rupkey, chief economist at FWDBONDS, said in a note. ‘One way or another, tariffs will be a shock for the economy.’
The sweeping tariffs on Canada and Mexico had been due to come into force in February, but had been delayed for a month.
Some investors fear the levies will be inflationary, as well as pushing up the cost of everyday products for American consumers.
The stock market fell after President Donald Trump confirmed tariffs on Canada and Mexico would go into effect at midnight
Monday’s stock market sell-off comes after the three major Wall Street indexes recorded losses for February.
The losses were largely due to fears about the impact of tariffs – which also includes an increase to duties imposed on China – alongside fears over sticky inflation and a slowing US economy.
Stocks set to take a direct hit from the tariffs or from retaliation from the targeted countries also fell on Monday, CNBC reported.
Automakers GM and Ford fell following the announcement, over fears the duties could disrupt a quarter of a trillion dollars in trade.
Nvidia led the losses in the technology sector, losing more than 9 percent in afternoon trading.
This is a breaking news story. Updates to come.
