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Stock markets fall after US tariffs spark trade war fears

## Trump's Tariffs Trigger Global Market Plunge and International Condemnation

President Donald Trump's imposition of 25% tariffs on imports from Canada and Mexico, and a 20% levy on goods from China, has sent shockwaves through global markets, sparking sharp declines and fierce international condemnation. The move, justified by Trump as a necessary measure to curb illegal immigration and drug flows, has been widely denounced as economically reckless.

**Market Meltdown:** The announcement triggered immediate and sustained market declines. US stock indexes, including the Dow Jones, S&P 500, and Nasdaq, fell sharply for a second consecutive day, each closing down 1.4%. European markets suffered similarly, with the German Dax plummeting 3.5% and the French CAC falling 2%. The UK's FTSE 100 ended the day down 1.2%, with Chancellor Rachel Reeves warning of inevitable knock-on effects, including slower economic growth and higher inflation, regardless of whether the UK faces direct tariffs.

**International Backlash:** The international response has been swift and scathing. Canadian Prime Minister Justin Trudeau called the tariffs "a very dumb thing to do," announcing retaliatory tariffs totaling $155 billion on US goods. China, the US's largest buyer of agricultural goods, also retaliated with tariffs on US wheat, corn, beef, and soybeans, vowing to "fight to the bitter end" against further trade hostilities. Mexico's President Claudia Sheinbaum promised a response on Sunday, encompassing both tariff and non-tariff measures. The European Union's trade spokesperson, Olof Gill, warned the tariffs threaten "deeply integrated supply chains, investment flows, and economic stability." Trump's threat to impose tariffs on the EU was also met with pledges of retaliation.

**Economic Fallout:** Analysts predict significant economic consequences. TD Economics estimates a potential $3,000 price increase on cars due to the complex cross-border supply chains between the US, Canada, and Mexico. Higher prices for consumers are already anticipated, with retailers like Target warning of increased costs for avocados, bananas, and strawberries. Best Buy's CFO also voiced concerns about the impact on consumer spending. The potential for economic recessions in Mexico and Canada, coupled with higher inflation globally, is raising concerns about interest rate adjustments. While US Commerce Secretary Howard Lutnick dismissed concerns about short-term price increases, many businesses, including Chipotle, expect to pass on increased costs to consumers. Ford CEO Jim Farley warned that the automotive industry could face billions of dollars in losses and job cuts.

**Trump's Justification Questioned:** Trump's claim that the tariffs address illegal immigration and drug flows has been dismissed as "completely bogus" by Prime Minister Trudeau. The inherent risks of escalating trade wars and the potential for broader global economic instability remain significant concerns. The situation is further complicated by souring US-Ukraine relations, with the US freezing military aid to Ukraine adding another layer of uncertainty to the global economic outlook. The deeply integrated economies of North America face severe disruptions, with billions of dollars in goods crossing their borders daily. The long-term consequences of this trade war remain to be seen, but the immediate impact is undeniably negative.

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