Donald Trump’s decision to significantly increase tariffs on Canadian goods has already had negative consequences.
The former president is engaged in a tariff battle with countries such as Canada, Mexico, and China, with Canada facing particular pressure.
Initially, Trump imposed a 25 percent tariff on goods imported from Canada, but this has been raised to 50 percent on steel and aluminum, effective tomorrow.
Trump announced on his Truth Social platform: “I have instructed my Secretary of Commerce to add an ADDITIONAL 25% Tariff, to 50%, on all STEEL and ALUMINUM COMING INTO THE UNITED STATES FROM CANADA, ONE OF THE HIGHEST TARIFFING NATIONS ANYWHERE IN THE WORLD.”
Following this announcement, the US stock market experienced an immediate decline.
Currently, the Dow Jones Industrial Average has dropped approximately 600 points, while the S&P 500 has decreased by 0.6 percent.
Art Hogan, chief market strategist at B. Riley Wealth, explained to CBS MoneyWatch the significant impact of Trump’s tariffs on the US stock market: “The market has been down for three weeks in a row, largely driven by uncertainty about where trade policy lands, full stop.
“We’ve been inundated with tariff announcements that, unlike the 2018 playbook, are actually being applied universally versus the surgical approach we saw with term 1.0.
“Unless and until we know where the goal posts actually are on trade and tariffs, this uncertainty will continue to weigh on markets.”
In other developments, Goldman Sachs has adjusted its annual growth forecast downward to 1.7 percent from the previous 2.2 percent.
They have slightly raised their recession probability to 20 percent, noting that ‘the White House has the option to pull back policy changes if downside risks begin to look more serious’.
Experts are labeling this situation as something that cannot be ignored.
“The threat of a recession is real,” Olu Sonola, head of US regional economics at Fitch Ratings, told ABC News.
“It’s a threat you cannot ignore,” he further emphasized.
Moody’s Analytics has assessed the risk of recession at 35 percent as of yesterday.
Mark Zandi, chief economist at Moody’s Analytics, described this figure as ‘uncomfortably high’ and cautioned that ‘it’s rising’.
Many attribute the heightened risk of recession to Trump’s unpredictable policy decisions.