S&P 500 Suffers $3.4 Trillion Loss As Trump’s Tariffs Spark Trade War With Canada, China
The S&P 500 fell on Tuesday, officially erasing all the gains it had accrued since Donald Trump was declared winner of the 2024 presidential election in November as the US president made good his threats to impose sweeping tariffs on America’s largest trading partners.
A total of $3.4 trillion in value has now been wiped out since November 6, the day after the election was held, according to data from Bloomberg, reported by NBC news.
On Monday, Trump announced that the 25 per cent tariffs on goods from Mexico and Canada will take effect Tuesday, with 10 per cent on the country’s energy, raising fears of a trade war in North America and sending financial markets reeling.
He said there was “no room left” for a deal that would avert the tariffs by curbing fentanyl flows into the United States. Trump also said reciprocal tariffs would take effect on April 2 on countries that impose duties on US products.
Trump also raised fentanyl-related tariffs on Chinese imports to 20 per cent from 10 per cent currently, unless Beijing ends fentanyl trafficking into the US.
However, on Tuesday other major indexes fell in tandem: The tech-heavy Nasdaq Composite declined 1.5 per cent — edging closer to correction territory, meaning it is close to being 10 per cent lower than its last high; while the blue-chip Dow Jones Industrial Average fell 1.8 per cent.
The biggest losers included automakers like GM and Ford, both of whom have significant manufacturing facilities in Mexico. Chipotle, which sources about half of its avocados from Mexico, slipped more than 2 per cent.
China responded to the new US tariffs by announcing it will impose additional tariffs of up to 15 per cent on imports of key US farm products, including chicken, pork, soy and beef, and expanded controls on doing business with key US companies.
Canada plans on slapping tariffs on more than $100 billion of American goods over the course of 21 days. Mexico also plans tariffs on goods imported from the US.
The development took place as the US Commerce Secretary, Howard Lutnick, said in an interview with Fox News, that Trump was willing to shift ground if both Canada and Mexico are willing to do more. However, he added that the issue of pausing the tariffs altogether will not arise.
“Both Mexicans and Canadians were with me all day trying to show that they will do better. And the president is listening because he’s very fair and very reasonable. It’s not going to be a pause, none of that pause stuff, but I think he’s going to figure it out.
“You do more and I will meet you in the middle and we are going to probably be announcing that tomorrow. So, somewhere in the middle will likely be the outcome. (That is) the president moving with the Canadians and Mexicans, but not all the way,” Lutnick stated.
Emmanuel Addeh
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