25% Tariffs Hit Canada, Mexico: Will US Equities Crack?
What happened?
Trump made good on his words and invoked emergency powers late last night to see the 25% tariffs on most imports from Canada and Mexico go live, plus a 10% levy on Chinese goods, bypassing Congress. He did so via executive order, bypassing Congress, which he justified by alleging these nations enabling the US fentanyl crisis.
Why does this matter?
Market panic: tariffs could shave 1-2% off US GDP, with deeper pain for Canada and Mexico. Equities face a sharp selloff unless the measures are reversed.
Retaliation escalates: Ontario threatened to cut power to 1.5 million New Yorkers, while Mexico and China plan counter-tariffs on US agriculture and tech.
What’s the caveat?
A last-minute reversal remains possible—past Trump tariffs often saw 11th-hour walkbacks.
Some firms, like Honda, are accelerating US production shifts to dodge duties, softening the blow.
finformant view
Markets have grown numb to tariff threats, but these measures—if sustained—risk a substantial S&P 500 plunge. Even a reversal would likely only trigger a fleeting rally, as investors now price in prolonged trade volatility.