March 3 (UPI) — President Donald Trump said Monday 25% tariffs on Mexico and Canada will be implemented Tuesday and another 10% against China. U.S. stocks tumbled after the announcement.
Canada announced equal reciprocal tariffs, with Mexico and China making plans to impose their own against the United States.
“No room left for Mexico or for Canada,” Trump said in the Roosevelt Room of the Oval Office alongside Commerce Secretary Howard Lutnick. “They’re all set. They go into effect tomorrow.”
Also, he said tariffs on all Chinese goods will double from 10% imposed on Feb. 14.
Trump’s comments sent the Dow Jones Industrial Average down 649.67 points, or 1.48%. The S&P fell 104.78, or 1.76%, to 5,849.72. And the NASDAQ, meanwhile, closed down 2.64%.
China already retaliated to Trump’s punitive measures with a 15% tariff increase.
And Trump said he will impose tariffs on countries already doing that, including in Europe.
“Reciprocal tariffs start on April 2,” Trump told reporters. “I wanted to make it April 1, but I didn’t want to … go April Fool’s Day.”
Trump, posting earlier on Truth Social, said he plans to implement tariffs on external agricultural products starting April 2. Examples include cereals, coffee beans, sugar, palm oil, eggs, milk, fruits, vegetables, beef, cotton and rubber.
“To the Great Farmers of the United States: Get ready to start making a lot of agricultural product to be sold INSIDE of the United States,” Trump wrote on Truth Social. “Tariffs will go on external product on April 2nd. Have fun!”
Trump initially delayed tariffs on Canada and Mexico by one month while the countries engaged in trade talks.
Canada appointed a so-called fentanyl czar and Mexico said it would deploy 10,000 troops to its shared border with the United States.
Lutnick said Canada and Mexico were doing “a reasonable job” of preventing drugs from entering their borders but not enough.
“He knows they’ve done a good job on the border,” he said in an interview with CNN before appearing with Trump. “They haven’t done enough on fentanyl.”
Trade with top partners
Trump is targeting $840 billion with Mexico, $762 billion with Canada and $582 billion with China as the top three trading partners.
Canadian Prime Minister Justin Trudeau said that Ottawa would immediately impose a 25% tariff on $30 billion in goods and on another $125 billion in 21 days for a total of $155 billion. Also, there will be a 10% tariff on Canadian energy and “several non-tariff measures” if the U.S. tariffs don’t cease.
“While less than 1% of the fentanyl intercepted at the U.S. border comes from Canada, we have worked relentlessly to address this scourge that affects Canadians and Americans alike,” he said in a statement from London where he met King Charles.
According to U.S. Customs and Border Protection statistics, last year, less than 50 pounds of fentanyl were seized by border authorities at the U.S. northern border.
The biggest imports from Canada to the United States include crude petroleum, cars and petroleum gas.
“Because of the tariffs imposed by the U.S., Americans will pay more for groceries, gas and cars, and potentially lose thousands of jobs,” the prime minister said. “Tariffs will disrupt an incredibly successful trading relationship. They will violate the very trade agreement that was negotiated by President Trump in his last term.”
China “firmly rejects” additional U.S. tariffs and will take countermeasures, the Ministry of Commerce said in a statement.
The average effective U.S. tariff rate on Chinese goods will hit 33%, the largest in U.S.-China history.
China is a big importer of auto parts and toys.
“I have determined that the PRC has not taken adequate steps to alleviate the illicit drug crisis through cooperative enforcement actions, and that the crisis described in Executive Order 14195 has not abated,” Trump said in his order, while referring to China by the initials of its official name, the People’s Republic of China.
Mexican President Claudia Sheinbaum said she will respond if the tariffs go through.
The biggest imports include vehicles, machinery, electronics and petroleum. Mexico is a major supplier of fresh fruits and vegetables to the United States.
Reaction
Economists warn that the tariffs will have a negative impact on the United States and American consumers. The Washington-based Peterson Institute for International Economics states that tariffs on Canada, Mexico and China would cost the typical U.S. household more than $1,200 a year.
Warren Buffett, who is worth $133 billion, according to Forbes, told CBS News’ Norah O’Donnell, “Tariffs are actually — we’ve had a lot of experience with them — they’re an act of war, to some degree.
He disputed Trump’s belief that the nations pay for the tariffs rather than ultimately consumers.
Buffett said: “I mean, the Tooth Fairy doesn’t pay ’em! And then what? You always have to ask that question in economics. You always say, ‘And then what?'”
Chris Rupkey, chief economist at FWDBONDS, said in a note: “Whether the stock market can survive this change remains to be seen. One way or another, tariffs will be a shock for the economy.”
BCA downgraded a recommendation for U.S. equities from neutral to underweight, according to CNBC. The firm also upgraded euro area stocks to overweight from neutral.
“In the US, economic uncertainty brought about by Trump’s policies have reversed the surge in animal spirits that followed the U.S. election,” the note said.
Economic, stock market fallout
Stocks tumbled Monday.
The Dow Jones Industrial Average slid 649.67 points, or 1.48%, to close at 43,191.24. The record was 45,014 on Dec. 4 with the 2025 high 44,882.13 on Jan. 30.
The S&P fell 104.78, or 1.76%, to 5,849.72 . The S&P record was 6,100 on Dec. 6, 2024.
NASDAQ slumped 497.09, or 2.64%, to close at 18,350.19, with Nvidia, an American tech company, dropping more than 8%. The index’s record was 20,204.58 on Dec 16.
The first trading day in March comes after the three major indexes notched losses for February on the feared effect of tariffs and early signs of a weakening economy.
On Monday, gold futures gained $55.60, or 1.95%, to $2,904. The precious metal rebounded from a loss of roughly 3% last week. The all-time high price for gold was $2,954.72 per ounce on Feb. 20, 2025.
Factory activity in the U.S. eased slightly in February, still indicating modest expansion despite worries over the effects of tariffs, a survey Monday showed.
The Federal Reserve will meet on March 19 about whether to lower interest rates. It currently stands at 4.25% to 4.5%
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