Global Markets Plunge as Trump Imposes Sweeping Tariffs on Canada, Mexico, and China

Global markets tumbled Monday after U.S. President Donald Trump imposed new tariffs on Canada, Mexico, and China, escalating trade tensions and fueling fears of inflation and slower economic growth. U.S. stock futures plummeted, with Nasdaq down 2.35% and S&P 500 futures falling 1.8%.

In response, Canada announced 25% retaliatory tariffs on $155 billion worth of U.S. goods, with an initial $30 billion taking effect Tuesday. Mexico’s President Claudia Sheinbaum also vowed countermeasures. China pledged "counter actions," as concerns mount over economic fallout.

Trump’s executive orders enforce 25% tariffs on Mexican and Canadian imports and 10% on Chinese goods, starting Tuesday. The uncertainty surrounding the tariffs has unsettled markets, with analysts warning of declining corporate profits, a stronger U.S. dollar, and higher inflation. The Canadian dollar and Chinese yuan weakened sharply, while the Mexican peso slid nearly 12% in anticipation of the tariffs.

Investors fear that the move could stall Federal Reserve interest rate cuts, potentially shaking financial markets. Barclays estimated the tariffs could slash S&P 500 earnings by 2.8%, while Goldman Sachs predicts a 0.7% increase in core inflation and a 0.4% hit to U.S. GDP.

The euro dropped over 1%, hitting a two-year low, while oil prices jumped more than $2. Wall Street strategists expect further stock sell-offs if the tariffs remain. The Federal Reserve, which paused rate cuts last week, is closely monitoring the situation.

With uncertainty looming over global trade, investors brace for volatility as markets assess the long-term impact of Trump’s latest trade war escalation.