Global markets rallied on Wednesday, with investors breathing a sigh of relief after President Donald Trump announced his plans to impose 25% tariffs on Canada and Mexico. However, just one month earlier, the US had paused its plan for a similar move.
The Nasdaq and S&P 500 indices closed lower on Tuesday, but futures rebounded as traders anticipated Trump’s potential compromise with Canada and Mexico. The Dow Jones Industrial Average rose 0.7%, while Nasdaq 100 futures gained 0.9%.
European markets also jumped, with Germany’s DAX index rising 3.5%. China’s Premier Li Qiang signaled confidence in his country’s economy despite trade tensions with the US.
After pausing its contentious plan for a month, Trump reimposed 25% tariffs on imports from Canada and Mexico. However, Commerce Secretary Howard Lutnick said talks with Canada were likely to reduce some of the newly imposed tariffs.
Canada swiftly responded with 25% retaliatory tariffs, while Mexican President Claudia Sheinbaum planned to speak to Trump this week. The US has warned that additional costs from the tariffs would be passed on to American consumers rather than foreign exporters.
Despite investor relief, economists warn that Trump’s trade policy review is far from over, and new tariff actions are likely ahead.
Source: https://www.businessinsider.com/markets-trump-tariff-compromise-lutnick-commerce-canadia-mexico-stocks-2025-3