US markets fell heavily after Donald Trump said he would press ahead with imposing tariffs of 25 per cent on all imports from Canada and Mexico from Tuesday, adding that there was “no room” for last-minute negotiation.
The US president’s comments worsened a market sell-off, adding to fears that the tariffs will impact the health of the US economy.
The S&P 500 share index closed 1.8 per cent lower after its worst session of the year, while the tech-dominated Nasdaq Composite dropped 2.6 per cent. Individual stocks fared worse, with chipmaker Nvidia plunging 8.7 per cent and energy group ConocoPhillips down 6.6 per cent.
Mr Trump’s remarks came a day after his commerce secretary Howard Lutnick suggested that the extent and timing of the planned tariffs were still to be finalised.
But at the White House on Monday afternoon, Mr Trump said: “The tariffs, you know, they’re all set. They go into effect tomorrow.”
On Monday, data from the Atlanta Fed suggested that the rate of US GDP growth in the first quarter would decline by 2.8 per cent, a much steeper fall than it had indicated on Friday. Economists attributed the shift in part to uncertainty over Mr Trump’s tariffs.
Last month, the president issued an executive order applying additional tariffs of 25 per cent to all imports from Canada and Mexico, with the exception of Canadian oil and energy products, which will face a 10 per cent levy.
Canada is by far the biggest foreign oil supplier to the US, accounting for about 60 per cent of its crude imports.
Days later, he postponed the implementation of the tariffs to March 4th following frantic last-minute diplomacy between him, Mexican president Claudia Sheinbaum and Canadian prime minister Justin Trudeau.
On Monday, Mr Trump said Canada and Mexico were “going to have a tariff”, suggesting that the measures would incentivise the two countries to move more of their manufacturing into the US.
“So 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,” he said.
Last week, Mr Trump threatened to boost his additional tariffs on Chinese imports to 20 per cent beginning on Tuesday. A White House official confirmed on Monday that Mr Trump had already signed an executive order to apply tariffs of 20 per cent on Chinese imports beginning on Tuesday.
When asked on Monday what the maximum tariffs against Chinese imports would be, he replied: “I can’t say, it depends on what they do with their currency, it depends on what they do in terms of . . . some kind of an economic retaliation.”
He added that he did not expect Beijing to “retaliate too much”. – Copyright The Financial Times Limited 2025
