US President Donald Trump's 25 per cent tariffs on goods from Mexico, Canada, and China, which take effect from Tuesday, March 4, 2025, has sent global financial markets falling.
The Indian stock market in particular, tumbled upon opening on Tuesday, with the benchmark BSE Sensex dropping by 341.82 points or 0.47 per cent, reaching 72,744.12 and the broader NSE Nifty opening 132.80 points down or 0.6 per cent in the red, reaching 21,986.50.
The Indian stock market on Tuesday saw a record 10th straight day of decline amid continuous selling by overseas investors.
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How did global stock markets perform?
The Dow Jones Industrial Average fell by 649.67 points, or 1.48 per cent, the S&P 500 lost 104.78 points, or 1.76 per cent, and the Nasdaq Composite dropped by 497.09 points, or 2.64 per cent.
Meanwhile, Japan's Nikkei and Hong Kong's Hang Seng saw the biggest drop, tumbling over two per cent and 1.5 per cent respectively.
US Automaker shares meanwhile, fell sharply. Prominent examples include General Motors, which has significant truck production in Mexico, falling 4 per cent and Ford dropping 1.7 per cent.
A report by news agency Reuters quoted Gustavo Flores-Macias, a public policy professor at Cornell University as saying that US consumers could see price hikes within days.
{{/usCountry}}A report by news agency Reuters quoted Gustavo Flores-Macias, a public policy professor at Cornell University as saying that US consumers could see price hikes within days.
{{/usCountry}}"The automobile sector, in particular, is likely to see considerable negative consequences, not only because of the disruption of the supply chains that crisscross the three countries in the manufacturing process, but also because of the expected increase in the price of vehicles, which can dampen demand," he said.
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The tariffs also pushed bond yields lower, with the Mexican peso and Canadian dollar both falling as well, following Trump's remarks on Monday.
For China, Trump reaffirmed he will increase tariffs to 20 per cent and remarked that there was "no room left" for a deal that would avert the tariffs which are aimed at curbing fentanyl flows into the US.
Meanwhile, Canada responded with Prime Minister Justin Trudeau stating on Monday that there would be a 25 per cent retaliatory tariffs on C$155 billion ($107 billion) worth of US goods, which will come into effect at the same time.
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Meanwhile, Mexico had avoided the first round of Trump's tariffs by striking a last-minute deal to send thousands of troops to its northern border.
It has now stepped up anti-drug efforts and hinted at new measures on imported Chinese goods.