US, Canada, Mexico, and China brace for economic turmoil as Trump escalates trade war with steep tariff hikes.
MARCH 4, 2025: Stock markets across the globe plunged after US President Donald Trump reaffirmed plans to hike tariffs on Canada, Mexico, and China, igniting fears of a full-scale trade war. The Dow Jones, S&P 500, and Nasdaq all witnessed steep losses, while Asian and European markets also fell sharply.
With investors fleeing risky assets, India’s Nifty 50 is likely to open nearly 1% lower, continuing the sell-off triggered by escalating geopolitical tensions.
Trump’s Tariff Announcement Shocks Markets
Trump confirmed that a 25% tariff on imports from Canada and Mexico would take effect from Tuesday, following a 30-day pause linked to border security concerns. Additionally, tariffs on all Chinese imports will be raised from 10% to 20%, citing Beijing’s failure to curb fentanyl shipments to the US.
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“They’re going to have to have a tariff. If they want to avoid it, they should build their plants in the US,” Trump stated at the White House.
The tariffs will be implemented at 12:01 a.m. EST (0501 GMT) on Tuesday, with US Customs and Border Protection confirming their enforcement across industries, including automobiles, energy, and consumer goods.
Trump dismissed concerns about economic damage, claiming that tariffs are essential to correcting trade imbalances and protecting US manufacturing.
Global Reactions: Canada, Mexico & China Fire Back
- 🇲🇽 Mexico: President Claudia Sheinbaum vowed retaliatory measures, stating “Mexico has to be respected.”
- 🇨🇦 Canada: Foreign Minister Melanie Joly and Ontario Premier Doug Ford warned of a “disastrous economic fallout”, with Ford threatening to halt nickel exports and electricity supply to the US.
- 🇨🇳 China: The Global Times reported that Beijing is preparing countermeasures, likely targeting US agricultural and food exports.
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Stock Markets Plunge Amid Economic Uncertainty
📉 US Markets:
- Dow Jones: -649.67 points (-1.48%)
- S&P 500: -104.78 points (-1.76%)
- Nasdaq Composite: -497.09 points (-2.64%)
📉 Global Markets:
- Japan’s Nikkei 225: -2.43%
- Hong Kong’s Hang Seng: -1.97%
- Sydney’s ASX 200: -1.12%
- India’s Nifty 50: Expected to open nearly 1% lower
📉 Automaker Stocks:
- General Motors: -4%
- Ford: -1.7%
Analysts warn that consumers will feel the impact within days, as tariff-induced price hikes could raise costs for vehicles and essential goods.
Trump’s ‘Tariffs on Steroids’ Plan & Future Trade War Risks
Trump has revived a probe into digital services taxes, launched a new tariff investigation on copper imports, and proposed $1.5 million fees for Chinese-built ships entering US ports.
Desmond Lachman, a senior fellow at the American Enterprise Institute, warned that Trump’s aggressive tariff strategy could drive inflation higher and tip the global economy into recession.
With geopolitical uncertainty at its peak, investors remain on edge, closely watching how Canada, Mexico, and China respond to Trump’s latest economic offensive.
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