By admin 
New Delhi:
Stock markets across the world plummeted after U.S. President Donald Trump confirmed that tariffs on Mexico and Canada would be implemented as planned. His statement on Monday heightened fears of a trade war in North America, sending financial markets into turmoil. U.S. stocks saw a sharp decline in late-afternoon trading, while the Mexican peso and Canadian dollar also weakened.
Trump’s New Tariff Plan
President Trump announced a 25% tariff on imports from Canada and Mexico, set to take effect on Tuesday, following the expiration of a 30-day pause on duties linked to illegal border crossings and fentanyl trafficking. Additionally, he vowed to increase tariffs on all Chinese imports from 10% to 20% as a penalty for Beijing’s failure to curb fentanyl shipments to the U.S.
What Trump Said?
“They’re going to have to have a tariff. 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,” Trump stated at the White House.
He added that there was “no room left” for negotiations to avoid tariffs by restricting fentanyl flows into the U.S.
On increasing tariffs for Chinese imports, Trump stated in an official order that Beijing “has not taken adequate steps to alleviate the illicit drug crisis.”
The tariffs are set to take effect at 12:01 a.m. EST (0501 GMT) on Tuesday, as confirmed by the Trump administration in Federal Register notices. At that point, U.S. Customs and Border Protection will begin collecting tariffs—25% on Canadian and Mexican goods and 10% on Canadian energy imports.
Trump has long argued that tariffs help correct trade imbalances and protect American manufacturing, downplaying concerns that these measures could harm the U.S. economy. Despite deep economic ties in North America, where businesses have benefited from decades of free trade, Trump insists that these tariffs are necessary.
Impact on North America’s Economy
According to CEOs and economists, Trump’s tariffs on Canada and Mexico—covering over $900 billion in annual U.S. imports—will deliver a serious blow to North America’s highly interconnected economy.
Reactions from Canada, Mexico, and China
- Mexico‘s economy ministry stated that there would be no public response until President Claudia Sheinbaum’s morning press conference on Tuesday. However, on Monday, she hinted at a strong response, stating at an event in Colima that “Mexico must be respected.” She added, “We have a Plan B, C, and D.”
- Canada is also preparing a response. Foreign Minister Melanie Joly told reporters that Ottawa was ready to react but did not provide specifics.
- Ontario Premier Doug Ford warned that U.S. tariffs and Canada’s retaliation could be disastrous for both nations, predicting that Michigan’s auto plants could shut down within a week. Ford also threatened to halt nickel shipments and cross-border electricity supply to the U.S.
- China’s state-run Global Times reported that Beijing has prepared countermeasures, likely targeting U.S. agricultural and food products.
Market Reactions
- U.S. Stock Markets Plunge:
- Dow Jones: Down 649.67 points (-1.48%)
- S&P 500: Lost 104.78 points (-1.76%)
- Nasdaq Composite: Dropped 497.09 points (-2.64%)
- Magnificent Seven tech stocks index fell 3.1%
- UBS’ basket of U.S. tariff-sensitive stocks declined 2.9%
- Asian and Australian Markets Decline:
- Tokyo, Hong Kong, and Sydney markets fell
- Nikkei 225 plunged 2.43%
- Topix Index dropped 1.48%
- Indian Market Outlook:
- Nifty is expected to open nearly 1% lower
- Investors are worried about escalating geopolitical tensions and retaliatory tariffs further worsening the global trade dispute
Impact on the Auto Industry
- Automakers suffered major losses:
- General Motors, which manufactures many trucks in Mexico, dropped 4%
- Ford fell 1.7%
Cornell University public policy professor Gustavo Flores-Macias warned that consumer prices could rise within days.
“The automobile sector, in particular, is likely to see considerable negative consequences—not only because of the disruption in supply chains across the three countries but also due to an expected rise in vehicle prices, which could reduce demand,” he explained.
👉 With Trump’s new tariffs shaking global markets, investors remain cautious as geopolitical tensions and economic uncertainties intensify.
Gill Bikram Singh