President Donald Trump said that tariffs on goods from Mexico and Canada would go into effect Tuesday, ending a month-long delay and sending stock prices into a swift decline.
On Wall Street on Monday, the Dow Jones Industrial Average closed down around 1.5 percent, as investors digested Trump’s comments. The broader S&P 500 index fell nearly 2 percent. Both market measures are now in the red since Trump’s election win.
Imposing tariffs on everything Americans buy from Mexico and Canada is an extraordinary political gamble by a president who was returned to power by voters angered over years of high inflation. The new import taxes are likely to raise the market prices of Mexican tequila, beer and avocados, along with Canadian crude oil and lumber, testing consumer patience with Trump’s approach.
Tariffs on China will also increase by an additional 10 percentage points for the second time in two months, bringing the total tax on some Chinese products to 45 percent.
“Tomorrow, tariffs — 25 percent on Canada and 25 percent on Mexico. And that’ll start,” Trump told reporters. “So they’re going to have a tariff. So 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.”
Trump’s midafternoon announcement in the Roosevelt Room drew a rapid response from business groups, unions and the affected trading partners. Statements of opposition came from the National Foreign Trade Council, the Distilled Spirits Council and the International Association of Machinists.
Even some supporters of the president’s overhaul of trade policy were critical: “Tariffs are great when they stop unfair trade that could hurt U.S. producers and workers, but we have balanced trade with Canada, and tariffs don’t affect smuggled stuff like fentanyl,” said Lori Wallach, director of the Rethink Trade program at the American Economic Liberties Project.
Many analysts are skeptical of their long-term prospects: “This action effectively destroys the United States-Mexico-Canada Agreement (USMCA), disrupts the integrated North American economy we have spent decades building and forces American manufacturers to scramble to restructure their supply chains,” said William Reinsch, a trade specialist at the Center for Strategic and International Studies. “Meanwhile, the economy will be disrupted, consumers will pay higher prices, inflation will resume, and workers and farmers will lose their jobs, due to the inevitable retaliation.”
Both Canada and Mexico have vowed to hit back. The Canadian government plans to retaliate with levies on as much as $107 billion worth of U.S. goods, including oranges from Florida, motorcycles from Pennsylvania and home appliances from Ohio. The goal is to maximize pain in electoral swing states or those home to Trump supporters.
Several Canadian provinces have said they will implement their own retaliatory measures, including pulling U.S. alcohol from shelves and limiting procurement opportunities for U.S. firms. Ontario Premier Doug Ford has promised to cancel a nearly $70 million contract with Elon Musk’s Starlink and threatened to cut electricity exports to several U.S. states.
China already has imposed retaliatory tariffs on U.S. exports of farm machinery, coal and liquefied natural gas in response to the additional 10 percent tariff Trump put on Chinese goods early last month. His action Monday, citing China’s continued shipments of fentanyl precursors, added an additional 10 percent levy.
Trump is dismissive of the effect of tariffs on prices and inflation, claiming wrongly that foreign countries will pay the tab while acknowledging that Americans may feel “some pain.” The tariffs will cost the typical American household $1,200 each year, according to a separate analysis by economists at the Peterson Institute of International Economics. As a share of after-tax income, that is three times what the top 1 percent of households will pay.
Factories experienced “the first operational shock of the new administration’s tariff policy,” said Timothy Fiore, chair of the Institute for Supply Management’s manufacturing survey committee.
The ISM Manufacturing Purchasing Managers Index for February was 50.3, down from 50.9 the month before, and below Wall Street’s expectations. Input prices rose at their fastest pace since mid-2022, when consumer price inflation was at a 40-year high.
“Prices growth accelerated due to tariffs, causing new order placement backlogs, supplier delivery stoppages and manufacturing inventory impacts,” Fiore said. “Although tariffs do not go into force until mid-March, spot commodity prices have already risen about 20 percent.”
Since taking office six weeks ago, Trump has threatened or imposed tariffs on the top three U.S. trading partners; commodities such as steel, aluminum and copper; and products like pharmaceuticals, automobiles and semiconductors. And he has announced a comprehensive rethinking of U.S. tariffs that would match other countries’ tax rates on specific products in a “reciprocal” approach.

How I Trade for a Living, by Gary Smith, 1999

A good thread that quickly went into the ground based on politics from the usual suspects.
That's the easiest thing to lead you doing the wrong action.
I never based my holdings on politics or predictions.
I have been collecting over the years many predictions, especially bad ones, that were wrong for months and years.

Generally a good topic but has low correlation to what markets do in the next 1-4-16 weeks. A trader like me is interested only in what to do now and disregards politics and economic indicators.
There are concerns all the time. My idea is to be invested most times at 99+% (like Now), and be out only when I see very high risk.

Trading is a lot of work. I’ll give you credit for that. ISTM it would tend to be a “winner” during generally rising markets like recent history but more like a Kamikaze dive during long downturns. You’re successfully “gaming” the insane long running bull market. So are millions of other investors. What could possibly go wrong?

Generally a good topic but has low correlation to what markets do in the next 1-4-16 weeks. A trader like me is interested only in what to do now and disregards politics and economic indicators.
There are concerns all the time. My idea is to be invested most times at 99+% (like Now), and be out only when I see very high risk.

Trading is a lot of work. I’ll give you credit for that. ISTM it would tend to be a “winner” during generally rising markets like recent history but more like a Kamikaze dive during long downturns. You’re successfully “gaming” the insane long running bull market. So are millions of other investors. What could possibly go wrong?

The Trump administration may exclude government spending from GDP, obscuring the impact of DOGE cuts
No problem when you can move the variables around when necessary.

@yogibb said,
Noted in Barron's - Economy:
Atlanta Fed GDPNow is projecting economic contraction for 2025/Q1 of -1.5% (real) vs +2.3% previously, while Piper Sandler switched to -2% from +2% previously.

@Crash
Have you tried the MSN link WABAC posted above?
Works for me...
Edit/Add:
"Shown above are the rankings for 2024 and 5 years (all #1 to #5, then only selected families).
There are also tables for 10 years and for each category - 5 best and 5 worst."
The MSN article shows the top 5 families for 2024 but does't include data for 5 years, 10 years, or categories.