President Donald Trump's new tariffs, which include a 25% duty on imports from Canada and Mexico and increased tariffs on Chinese goods, have sparked significant backlash. Canada, Mexico, and China are responding with their own tariffs on U.S. goods, leading to higher prices, particularly for groceries and electronics. The stock market is already reacting negatively, with significant drops in the Nasdaq, S&P 500, and Dow Jones. Economists warn of potential impacts on U.S. inflation and corporate earnings, and even hint at a possible recession. The situation remains volatile, with future developments depending on negotiations between the U.S. and the affected countries.
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00:00Brace yourselves. Trump's new tariffs just went into effect, and the backlash is coming
00:04fast. Higher prices, trade war threats, and economic uncertainty. Let's break down exactly
00:09what's happening. But first, follow Benzinga so you never miss a major market update.
00:14As of March 4th, President Donald Trump's new tariffs officially took effect, slapping
00:18a 25% duty on imports from Canada and Mexico and raising tariffs on Chinese goods from
00:2410% to 20%. According to CNBC, Trump is justifying these moves by claiming Canada, Mexico, and
00:30China have failed to stop fentanyl from flowing into the U.S. But these new trade barriers
00:34are already causing major retaliation and economic concerns across the industries.
00:39These countries aren't holding back, though, specifically Canada. Prime Minister Justin
00:43Trudeau announced 25% tariffs on $20.7 billion worth of U.S. goods, including orange juice,
00:49peanut butter, and machinery, and warned that even tougher tariffs could follow in three
00:53weeks if the U.S. doesn't back down.
00:55Mexico's government is also fighting back. Mexican President Claudio Sheinbaum called
00:59the tariffs completely unjustified and is expected to announce Mexico's retaliation
01:03this Sunday.
01:04Also, China is hitting U.S. agriculture hard. Beijing just imposed new 10% to 15% tariffs
01:09on key American exports like meat, grains, and dairy, while also restricting 25 U.S.
01:15companies from doing business in China.
01:17But what does this mean for you? Well, higher prices are on the way. According to the Wall
01:21Street Journal, Target's CEO says shoppers will likely see grocery prices rise within
01:25days, especially on fruits and avocados from Mexico. Best Buy's CEO also warned that electronics
01:31like smartphones and laptops, which are heavily imported from China and Mexico, could get
01:36more expensive fast.
01:38Wall Street is not happy. The Nasdaq just slipped into correction territory, falling
01:42over 10% from its recent high, while the S&P 500 and Dow Jones both dipped in early trading.
01:47Automakers, homebuilders, and retailers, or basically any industry dependent on global
01:52supply chains, are already seeing stock losses. Even treasury bond yields dropped as investors
01:57rush towards safer assets.
01:59Well, what's next? Economists at Goldman Sachs estimate the U.S. inflation could jump
02:040.7% from these tariffs alone, with the S&P 500's corporate earnings taking a 2.8% hit
02:10if the trade war escalates. And if this drags on, Barclays strategists are warning that
02:15the recession could be on the table.
02:17So will Trump back down? Not likely. But will these tariffs last? Goldman Sachs says
02:23that they might be temporary, depending on how Canada, Mexico, and China respond to U.S.
02:28demands.
02:29How do you think this will play out? Will these tariffs get reversed, or is this just
02:33the start of a bigger economic slowdown? Let us know in the comments and follow us for
02:37real-time updates on the markets and more.