U.S. stocks sank sharply Monday after President Donald Trump announced 25% tariffs on goods imported from Canada and Mexico would take effect starting Tuesday.
The S&P 500 was down 1.7%, The Dow Jones Industrial Average sank more than 800 points, and the Nasdaq composite dropped more than 2.6%. The markets slid faster after President Trump announced the deadline on the tariff plan.
Early in February, President Trump expanded an economic emergency declaration in order to place 25% tariffs on nearly all goods from Canada and Mexico, and 10% tariffs on energy-related imports from Canada, including oil, natural gas and electricity. In a separate order, the president placed 10% tariffs on all goods imported from China.
In a new executive order Monday, President Trump also increased the tariff on all goods imported from China to 20%.
President Trump acknowledged the likely agricultural effects of the tariffs on Monday in a post on his social media site Truth Social.
"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. Tariffs will go on external product on April 2nd."
"Have fun!" the president said.
Trade groups warned that tariffs would raise prices for consumers.
"Tariffs are just one tool at the administration’s disposal to achieve a secure border, and we urge it to explore other options to accomplish the same goals. As long as these tariffs are in place, Americans will be forced to pay higher prices on household goods," said David French, Executive Vice President of Government Relations at the National Retail Federation. “We urge the Trump administration and our Canadian and Mexican counterparts to work together to quickly resolve our outstanding border security issues.”
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The tariff actions come on the heels of gloomy reporting on important U.S. economic indicators.
The nonpartisan, not-for-profit Conference Board reported its Consumer Confidence Index declined 7 points to 98.3 in February. Gallup's Economic Confidence Index, also released in February, showed that Americans' overall confidence in the economy remains in negative territory.
And a measure of consumer sentiment, from the University of Michigan, slid nearly 10% from January as inflation worries persisted.
