US stocks plummeted on Wednesday, erasing gains made since the presidential election, as tariffs imposed by the Trump administration on Canadian and Mexican goods took effect.
The move, which was announced in September, marks a significant escalation of trade tensions between the US and its two largest trading partners. The tariffs, worth around $12 billion, are aimed at forcing Canada and Mexico to agree to new terms under the North American Free Trade Agreement (NAFTA).
Stock market indices plummeted as investors bet on increased costs for companies that import goods from Canada and Mexico. The Dow Jones Industrial Average fell over 100 points in morning trading, while the S&P 500 index declined by around 1%.
The tariffs are the latest move by President Trump in his ongoing trade war with Canada and Mexico. Last month, he imposed new tariffs on steel and aluminum imports from both countries.
Canada and Mexico have vowed to retaliate against the US measures, threatening to impose their own tariffs on American goods. The Canadian government said it would take “swift action” if the US did not remove its tariffs.
The impact of the tariffs is expected to be felt across industries, including manufacturing and agriculture. Companies that rely heavily on imports from Canada and Mexico may see significant increases in costs, potentially affecting profits and stock prices.
As the trade war continues to escalate, investors are becoming increasingly cautious, leading to a decline in US stocks.
Source: https://www.ft.com/content/1f6dac3c-f2f8-4488-a350-3b029e44b463