US President Donald Trump paused tariffs on goods from Canada and Mexico, but the reprieve didn’t ease market concerns. The Nasdaq Composite slipped into correction territory as investors worried about the administration’s continued focus on tariffs despite their impact.
The 25% tariff increase for Canada and Mexico has been put on hold for one month, covering around 38% of Canadian imports and 50% of Mexican ones. This move comes after a White House official confirmed that Trump would pause tariffs on compliant goods under the North American trade agreement known as USMCA.
However, investors were not relieved by this news, with all major US benchmarks sinking. The Dow Jones Industrial Average fell 0.99%, while the S&P 500 dropped 1.78%. The tech-heavy Nasdaq Composite slid 2.61% to enter correction territory, wiping out its post-election gains.
Trump’s decision on tariffs has been seen as a move to appease automakers in Canada and Mexico but was met with skepticism from investors. Trump downplayed the idea that he watches the markets, which disappointed those banking on his ability to stabilize the stock market. US Treasury Secretary Scott Bessent dismissed the notion of “cheap goods” being integral to the American dream.
The pause in tariffs was seen as a temporary measure to ease trade tensions between the US and its NAFTA partners. But concerns persist about Trump’s stance on tariffs, which has fueled market volatility. The US economy is facing challenges, including high unemployment rates and low wage growth, which could exacerbate the impact of tariffs.
Other news from around the world includes China’s exports growing at 2.3% in the January to February period, significantly undershooting expectations. The European Central Bank cut interest rates by 25 basis points, while Japan’s Nikkei 225 dropped 2.25%.
Source: https://www.cnbc.com/2025/03/07/cnbc-daily-open-more-tariff-pauses-but-nasdaq-enters-correction.html