The actions fell on Monday when Wall Street prepared for the impact of New steep rates ordered by President Trump, with increasing fears that the new import tariffs could cause a commercial war that could push corporate profits and moisten consumer spending.
The Dow Jones industrial average showed 421 points, or 1%, at 44,123 in the morning trade. The wide base S&P 500 lost 1.5%, while the Nasdaq compound index with technological technology fell to 1.8%.
On Saturday, Mr. Trump signed an executive order that imposes 25% import tariffs from Canada and Mexico, while adding an additional 10% tax on China’s assets. Hours later, Canada responded with its own retaliation rates, while Mexico said it was also planning to broad USA.
Mr. Trump’s announcement led some economists to project that new rigid tariffs could cushion the economic growth of the United States and cause an increase in job loss.
“This development came before what we anticipate in our reference forecast and will lead us to degrade our 2025 global prognosis,” Oxford Economics wrote in a research note on February 3. “The last set of rates will lead to weaker growth of GDP, greater unemployment, higher interest rates and greater inflation this year in Canada, Mexico and the United States than in our January reference forecast.”
Initially, Canada ordered 25% retaliation rates in US imports as of Tuesday, including drinks, cosmetics and paper products worth 30 billion Canadian dollars ($ 20 billion).
Soon a second list of products, including passenger vehicles, trucks, steel and aluminum products, certain fruits and vegetables, beef, pig, dairy products, aerospace products and more. It was estimated that these goods are worth 125 billion Canadian dollars ($ 85 billion).
Mexico has only said that it will impose retaliation rates, not to mention any rate or products.
The stocks of car manufacturers fall
The actions of car manufacturers were difficult on Monday when Wall Street evaluated the impact of Trump tariffs on the automotive industry. Americans are buying more and more cars built in Canada or Mexico or that use imported parts of those nations.
For example, Volkswagen obtains 43%of its vehicles through Mexico, General Motors 22%and Ford 15%.
General Motors fell 5.5%, while Ford lost 3.9% and Tesla fell 5.4% in early trade.
Constellation Brands, the Corona Beer and Robert Mondavi Wine manufacturer, slid 4.7% after some Canadian officials said they planned to eliminate US alcohol brands from government stores.
The manufacturers were also attacked early. The manufacturer of agricultural equipment Deere & Co. fell 3.1%, while Caterpillar fell around 2.9%.
Trump’s promise of tariffs in the period prior to the elections was part of the reason why the Federal Reserve marked the number of interest cuts cuts that he expected to impose this year. Originally, the Central Bank had projected four cuts, but cut that number to two at its December meeting, citing still difficult inflation that could get worse under Trump’s commercial and immigration policies.
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