Donald Trump confirms Mexico and Canada tariffs - prompting a stock market sell-off

Donald Trump's expansion of tariffs to cover the top three trading partners of the United States has been greeted with a retreat in stock market values globally.

It was confirmed overnight that 25% tariffs on goods from Mexico and Canada had come into effect, along with an additional 10% on Chinese products, bringing the total import tax to 20%.

The tariffs will be felt heavily by US companies which have factories in Canada and Mexico, such as carmakers.

Mr Trump said: "They're going to have a tariff. So what they have to do is build their car plants, frankly, and other things in the United States, in which case they have no tariffs."

There's "no room left" for a deal that would see the tariffs shelved if fentanyl flowing into the US is curbed by its neighbours, he added.

Mexico and Canada face tariffs of 25%, with 10% for Canadian energy, the Trump administration confirmed.

And tariffs on Chinese imports have doubled, raising them from 10% to 20%.

Canada announced it would retaliate immediately, imposing 25% tariffs on US imports worth C$30bn (£16.3bn). It added the tariffs would be extended in 21 days to cover more US goods entering the country if the US did not lift its sanctions against Canada.

Mexico threatened both reciprocal tariffs and non-tariff measures.

China also vowed to retaliate and reiterated its stance that the Trump administration was trying to "shift the blame" and
"bully" Beijing over fentanyl flows.

Mr Trump's speech stoked fears of a trade war in North America, with the European Union seen as being next in Mr Trump's firing line.

He had previously threatened an opening salvo against Brussels "very soon".

Stock market indexes the Dow Jones Industrial Average and the Nasdaq Composite fell by 1.48% and 2.64% respectively on Monday and were on course for further declines on Tuesday.

The share prices for automobile companies including General Motors, which has significant truck production in Mexico, Automaker and Ford also fell.

? Follow Trump 100 on your podcast app ?

The losses were also felt in Asia and Europe.

Consumers in the US could see price hikes within days, an expert said.

Gustavo Flores-Macias, a public policy professor at Cornell University, New York, said "the automobile sector, in particular, is likely to see considerable negative consequences".

This is due to supply chains that "crisscross the three countries in the manufacturing process" and " because of the expected increase in the price of vehicles, which can dampen demand," he added.

Read more:
The effects of Trump trade tariffs explained
Trump hits out at Zelenskyy again

The Trump administration is gearing up to bring in other tariffs in the coming weeks.

On 2 April, reciprocal tariffs will take effect on all countries that impose duties on US products.

He is also considering 25% tariffs on goods from the EU "very soon" after claiming the bloc was created to "screw the United States".

(c) Sky News 2025: Donald Trump confirms Mexico and Canada tariffs - prompting a stock market sell-off