Global markets fell after stiff U.S. tariffs

Canadian Prime Minister Justin Trudeau has strongly criticized U.S. President Donald Trump for igniting a trade war after the implementation of sweeping tariffs on imports from Canada, Mexico, and China. Speaking to Americans, Trudeau attributed the escalating conflict to Trump’s policies, which he described as harmful to global economic stability and bilateral relations.

Key Developments

U.S. Tariffs and Immediate Retaliation:
- Starting March 4, 2025, the U.S. imposed a 25% tariff on most imports from Canada and Mexico, with Canadian energy products subject to a 10% tariff. Additionally, tariffs on Chinese imports were raised from 10% to 20%1 2.
- Canada responded by announcing retaliatory tariffs on over $100 billion worth of U.S. goods, with an initial C$30 billion (US$22 billion) taking effect immediately and the remainder in three weeks3 6.
Global Market Impact:
- Stock markets reacted negatively to the tariffs, with U.S. futures dropping significantly. The Dow fell by 150 points in premarket trading, while the S&P 500 and Nasdaq also declined by around 0.7%5.
- Investors expressed concerns over rising inflation, reduced consumer spending, and potential job losses as a result of the trade war5.
Trudeau’s Response:
- Trudeau called Trump’s tariffs an “existential threat” to Canada’s economy, emphasizing their potential to harm industries like automotive manufacturing that rely on cross-border supply chains3.
- He criticized Trump’s justification for the tariffs—citing drug trafficking and immigration issues—as baseless, particularly regarding fentanyl, which Trudeau noted rarely originates from Canada3.
China and Mexico Join Retaliation:
- China imposed additional tariffs of 10-15% on U.S. agricultural imports such as soybeans, pork, and beef4. Mexico is expected to announce its countermeasures soon1 6.

Broader Implications

The escalating trade war has raised fears of prolonged economic uncertainty. Analysts warn that these policies could lead to higher consumer prices globally and strain relations between key trading partners. While Trump views tariffs as a tool to protect American jobs and reduce trade deficits, critics argue they risk destabilizing international trade systems.

This story is ongoing as markets and governments continue to respond to the unfolding situation.