The US stock market suffered a huge blow as US President Donald Trump declared 25% tariffs on Canada and Mexico and a 10% tariff on China. As Trump made these announcements, Fox News caught the Dow Jones stocks taking a deep plunge into the unknown.
The plot thickens as Canada and Mexico announce that they will retaliate, with the possibility of Canada shutting off the electricity it provides to the US.
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Trump gave a speech
As Trump was taking questions at the White House, he talked about previous presidents being “very bad on trade.” During his talk, the live “Dow Watch” plummeted from 43,197.38 to 43,185.51 in only a matter of 20 seconds.
The US stock market slid down
The Dow went down by 650 points, or 1.48%, according to CNN. In addition, the S&P 500 fell 1.76%, its biggest one-day decline in 2025.
The Nasdaq Composite fell 2.64% and has been down by 6.5% since Trump became president on January 20.
Why Trump is doing this
For Trump, the aim behind the tariffs is to “punish” all parties involved as he believes that they take from the US economy and don’t give back enough.
“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,” the president said.
How Canada will retaliate
Canadian Prime Minister Justin Trudeau declared that Ottawa would respond instantaneously with tariffs on $30 billion of US goods if Trump stuck to his words.
“Canada will not let this unjustified decision go unanswered,” he said in a statement.
Why China got a share of the punishment, too
Trump signed an executive order on Monday, imposing tariffs on imports from China and upping them from 10% to 20%.
Trump did this to bring China into curtailing fentanyl entering the US, and according to Trump, China hasn’t done enough to stop the flow of illegal drugs into the US.
A professor of government and public policy at Cornell University weighs in
“Due to the uncertainty surrounding the tariffs, the stock market has erased the gains from the ‘Trump bump’ following the presidential election and the expected upward pressure on prices is giving investors pause,” said Gustavo Flores-Macias.
Gina Bolvin, president of Bolvin Wealth Management Group added: “For investors, 2025 can still be a positive year for stocks, but it may take all year to realize gains. And they may be modest.”
