American families and companies are getting ready for increased prices on nearly half of all goods imported into the US
The stock market tumbled on Monday after President Donald Trump imposed tariffs on Canada, Mexico, and China, prompting threats of retaliation and setting the stage for a potential trade conflict.
The Dow Jones Industrial Average dropped approximately 550 points, or 1.25%, during early trading on Monday. The S&P 500 fell 1.5%, while the technology-focused Nasdaq plunged by 2%.
Traders reacted nervously to a selloff in US automakers, which have strong connections to suppliers in Canada and Mexico. Shares of General Motors plummeted by 6%, and Ford’s stock dropped by 4%.
The downturn spread internationally. Japan’s Nikkei index declined by 2.5% on Monday, and the pan-European STOXX 600 dropped around 1%.
On Saturday, Trump imposed 25% tariffs on goods from Mexico and Canada, and 10% tariffs on products from China. The tariffs are scheduled to take effect on Tuesday, according to the White House
Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum quickly responded, promising to retaliate.
Trudeau stated that Canada would impose 25% tariffs on $155 billion worth of US goods, while Sheinbaum said she had instructed her government officials to enact what she called “Plan B,” which “includes tariff and non-tariff measures to protect Mexico’s interests.”
The tariffs imposed by the White House could lead to price increases on a range of items, from avocados and tequila to gasoline, experts previously informed ABC News. However, the actual price impact remains uncertain, as businesses in the supply chain may decide to absorb part or all of the tax burden.
Potential retaliatory tariffs from Canada and Mexico could make it more challenging for US exporters to compete in those markets, raising the likelihood of weaker sales.
