Trump tariffs send stocks into a dive as Canada, China retaliate

The United States imposed 25% tariffs on Canada and Mexico, sending the stock market tumbling hundreds of points on Tuesday while Trump administration officials sought to assure Americans their plans will bring long-term gains to jobs and the economy by bolstering “main street.”

China, which was slapped Tuesday with an additional 10% tariff on goods exported to the U.S., doubling the current tariff, announced it will immediately impose a retaliatory duty on imported U.S. agricultural goods.

Mexico will reveal plans for retaliatory “tariff and non-tariff measures,” on Sunday, Mexican President Claudia Sheinbaum said during a press conference.

Canadian Prime Minister Justin Trudeau called the tariffs “unjustified” and implemented a gradual plan to impose 25% tariffs on $155 billion in American goods, starting with $30 billion worth of goods immediately. The rest would go into effect in 21 days.

Canada already imposes steep tariffs on American goods, including dairy and other agricultural products, lumber, metals and shoes.

Mr. Trudeau said the new U.S. tariffs disrupted “an incredibly successful trading relationship,” but Trump administration officials said Canada has not done enough to stem the flow of fentanyl, a deadly synthetic opioid, across the northern border. The vast majority of the drug comes into the U.S. from Mexico and is produced from ingredients sent from China. But there has been an increase in fentanyl smuggling from Canada, the Trump administration said.

The stock market plunge started Monday, when Mr. Trump announced he won’t back off on the tariffs, and the selloff continued Tuesday. The Dow Jones Industrial Average plunged close to 700 points after the opening bell.

Top members of the president’s economic team said the short-term pain on Wall Street will return health and stability to U.S. manufacturing and jobs.

“Over the medium term, which is what we’re focused on, it’s a focus on Main Street. Wall Street’s done great, Wall Street can continue to do fine, but we have a focus on small business and consumers. We are going to rebalance the economy,” Treasury Secretary Scott Bessent told Fox News.

Democrat leaders attacked the tariffs.

Senate Minority Leader Charles E. Schumer, New York Democrat, said the tariffs will raise prices and cost households a $2,000 increase in expenses per year.

He accused the Trump administration of imposing tariffs to pay for an extension of all of the 2017 tax cuts, which Democrats say will mostly benefit billionaires. Democrats had hoped to extend tax cuts only for lower-income earners and to raise corporate tax rates that were slashed during Mr. Trump’s first term.

“I don’t think this is going to be seen very positively by the American people,” Mr. Schumer said.

Mr. Trump’s tariff plan has already brought new manufacturing to the United States.

The president unveiled a deal Monday with Taiwan Semiconductor Manufacturing Company (TSMC), which plans to invest at least $100 billion in five semiconductor chip factories in the U.S., mainly in Arizona, to avoid the looming tariffs.

Also on Monday, Honda announced it will move production of the new Honda Civic Hybrid from Mexico to a plant in Indiana.