US stocks plunged on Monday (Mar 4) after President Donald Trump said that America would go ahead with tariffs on Canada and Mexico from Tuesday, ending hopes of a last-minute deal with both nations to avert sweeping tariffs. The reciprocal tariffs are to start on April 2. 

Advertisment

Steep tariffs on Canadian and Mexican goods came into effect Tuesday as a deadline to avert levies passed without any deal. 

As per Trump's orders, Canadian goods will face a 25 per cent tariff, with energy resources hit by a lower 10 per cent rate. Meanwhile, Mexican products face a 25 per cent blanket levy. 

Also read: DOGE ate my savings?: Elon Musk claims his department saved $105bn, but math doesn’t add up

Advertisment

Asked about whether Canada and Mexico could avoid fresh tariffs by reaching a deal, Trump said, "No room left for Mexico or Canada." 

"Tomorrow, tariffs — 25% on Canada and 25% on Mexico. And that'll start. 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 said during a press conference at the White House.

Also read: ‘This guy doesn’t want peace’: Trump slams Zelensky’s remark suggesting Ukraine peace deal is ‘far away’

Advertisment

The Dow Jones Industrial Average slipped 1.5% to 43,191.24. The Dow tumbled 650 points (or 1.48%) to close at 43,191. It fell almost 900 points in afternoon trading, however, it pulled back slightly. The broad-based S&P lost 1.8% to finish at 5,849.72. 

The tech-rich Nasdaq took a harsher tumble, closing down 2.6% at 18,350.19. Meanwhile, the CBOE Volatility Index, or VIX surged, hitting its highest level since December. 

Also read: Trump claims he’s the only US prez who didn’t ‘surrender’ Ukraine’s land to Putin, but history says otherwise 

After coming to power earlier this year, Trump unveiled blanket tariffs on imports from major trading partners Canada and Mexico. He accused them of failing to stop illegal immigration and drug trafficking. The tariffs were paused for some days, but the US has decided to go ahead with them. 

Canada will slap tariffs on US imports beginning Tuesday in response to levies pledged by President Donald Trump, Prime Minister Justin Trudeau said Monday, adding "there is no justification" for Washington's actions.

Canadian foreign minister Melanie Joly in Ottawa said that Trump's looming tariffs represent an "existential threat" to the country, with thousands of jobs at stake. 

She further added that if Trump went ahead, "we are ready with counter tariffs."

Also read: ‘WEAK, TOTALLY INEFFECTIVE LOSER’: Trump rages at ex-security adviser who said he’s ‘being played’ by Putin

Tariffs on Chinese imports

Trump has also signed an order to hike tariffs on Chinese imports further, the White House said Monday, citing what it called Beijing's failure to tackle the illicit fentanyl trade. 

The order raises a previously imposed 10 per cent tariff on China to 20 per cent, as Trump promised, according to a White House social media post. 

While reacting to the same, Beijing on Tuesday warned that it would take countermeasures against the new US tariffs. 

"China is strongly dissatisfied with this and firmly opposes it, and will take countermeasures to resolutely safeguard its own rights and interests," a commerce ministry spokesperson said in a statement. 

(With inputs from agencies)