President Donald Trump said on Monday that the White House will forge ahead with imposing 25% tariffs on Mexico and Canada.
"No room left for Mexico or Canada," Trump told reporters during an unrelated White House event. "The tariffs are all set, they go into effect tomorrow."
Trump's comments deepened a sell-off in the stock market during Monday's trading session. The Dow Jones Industrial Average dropped as much as 848 points and the benchmark S&P 500 was down more than 2%. The Nasdaq Composite dropped 3%, with the tech-heavy index extending its decline after a sharp drop in Nvidia stock during the day.
Earlier in the day, Commerce Secretary Howard Lutnick had left the door open that the president might change his mind. Trump already paused the tariffs for a month based on both countries pledging to do more to stem illegal immigration.
Trump on Monday reiterated his view that the tariffs are punishment for Mexico and Canada for failing to do enough to prevent fentanyl from entering the US.
Both nations have already said how they would retaliate with their own tariffs. Canada published an extensive list of targeted American products, ranging from agricultural products to alcoholic beverages. Canadian Prime Minister Justin Trudeau previously called on his citizens to prepare to forgo American-made goods.
"It might mean checking the labels at the supermarket and picking Canadian-made products," Trudeau said last month. "It might mean opting for Canadian rye over Kentucky bourbon, or foregoing Florida orange juice altogether. It might mean changing your summer vacation plans to stay here in Canada."
The US imports a range of key goods from the two countries, including crude oil, car parts, and electronics, and trade policy experts previously told BI that new tariffs are likely to increase the prices of those goods.
Trump previously said that Americans would feel "some pain" with tariffs, but the price would be worth it in the end. Still, some companies have started to prepare for price increases caused by the tariffs. Real estate consultants previously told BI that Trump's 25% steel tariff will likely make rent and condo prices surge.
It's unclear how long these tariffs will last. Trump's initial executive order from February said that they would remain in effect until the affected countries cracked down on their drug and border policy.
