U.S. stock markets fell sharply in early trading Monday but pared their losses after President Donald Trump paused a planned 25% tariff on Mexican imports.
The three major U.S. stock indices — the Dow Jones Industrial Average of 30 blue chip stocks, the broader S&P 500 and the tech-heavy NASDAQ — all dropped nearly 2% or more on fears that Trump’s new tariffs targeting Canada, China and Mexico would threaten the global economy.
But the losses were cut in half after Trump paused the levy on Mexican goods for a month, even though his planned 25% tariff on Canadian goods and a 10% levy on Chinese imports were still set to take hold at midnight.
Trump was planning further discussions mid-afternoon Monday with Canadian Prime Minister Justin Trudeau.
Stock markets in Asia fell Monday amid investor concerns about the tariffs.
Japan’s Nikkei index closed down 2.66%, while South Korea’s KOSPI index finished off 2.5%.
Hong Kong’s Hang Seng index was down more than 2% in early trading before rallying to close down just .07%.
Britain’s FTSE index, Germany’s DAX and France’s CAC40 all dropped more than 1%.
Canada and Mexico both announced tariffs on U.S. goods in response to Trump’s move before Mexican President Claudia Sheinbaum told Trump she would send 10,000 National Guard troops to the U.S.-Mexico border to try to curb the flow of the deadly opioid fentanyl into the U.S. and Trump paused his tariff on Mexican imports.
China has pledged to file a protest with the World Trade Organization over the Trump tariff increase on its exports to the U.S.
Canada, China and Mexico are the top three U.S. trade partners.
Some information for this story came from The Associated Press and Reuters.
