Broad 25% tariffs on all imports from America's two largest trading partners, Mexico and Canada, go into effect today, according to President Donald Trump's latest comments. The tariffs were delayed for a month to facilitate talks with Mexico and Canada on addressing drug trafficking and migration at the US border.
All three major US indexes slid on the news (S&P 500 -1.8%, Dow -1.5%, Nasdaq -2.6%) yesterday, with the S&P 500 posting its biggest loss since December. Nasdaq's slump was led by Nvidia, which fell nearly 9%. The Canadian dollar and Mexican peso slipped to one-month lows after Trump's comments.
Mexico has already deployed 10,000 National Guard troops to its northern border, while Canada appointed a fentanyl czar, even though Canada accounts for less than 1% of fentanyl smuggled into the US (see data). China also faces a broad 20% tariff on its imported goods, up from 10% imposed last month. See how tariffs could impact consumers here.
Separately, the US paused military aid to Ukraine following last week's heated Oval Office meeting between Trump and Ukrainian President Volodymyr Zelenskyy.
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