US stocks closed lower on Monday amid growing concerns over the impact of President Donald Trump’s decision to raise tariffs on goods from major trading partners—Canada, China, and Mexico. However, market losses were not as severe as initially expected after Mexico announced it had negotiated a one-month delay on the tariff imposition.
Trump signed an executive order imposing additional tariffs of 25 percent on goods imported from Mexico and Canada, and another 10 percent on imports China. This move prompted immediate retaliatory action from Canada and raised the prospect of a trade war—one that could negatively affect not only the involved countries but also the global economy.
The Dow Jones Industrial Average dropped 0.3 percent, while the S&P 500 lost 0.8 percent. The Nasdaq Composite gave up 1.2 percent. Losses in early trades were larger.
European markets fared worse after Trump threatened to impose similar tariffs on Europe to address the US trade deficit.
Some of the heaviest losses hit technology and other companies most vulnerable to the effects of higher interest rates, which could result from increased US tariffs on imports from Canada, China, and Mexico.
Market observers worry that higher taxes on imported goods could drive up prices for groceries, electronics, and household items, adding pressure to inflation. This, in turn, could force the Federal Reserve to delay cutting interest rates—or even raise them if inflation starts to rise.
