P.M. Edition for Mar. 4. Markets closed lower as investors reckoned with President Trump’s new tariffs on Mexico and Canada and those countries’ responses. Plus, WSJ economic policy reporter Gavin Bade explains why this could be only the first or second salvo of this trade war. And White House reporter Tarini Parti tells us what to watch for in President Trump’s address to Congress later this evening. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What are the new tariffs introduced by the U.S.?
This is only the first or second salvo of this trade war. We have a whole handful of tariffs coming up next month.
And what to watch for when Trump addresses Congress tonight. It's Tuesday, March 4th. I'm Alex Osola for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. Präsident Trumps Tariffs, a 25% duty on goods from Canada and Mexico and an additional 10% tariffs on goods from China, went into effect at midnight.
The president has blamed Canada and Mexico for the flow of immigrants and illicit drugs like fentanyl into the U.S. and said that tariffs are on, quote, until the crisis is alleviated. Markets were rattled by the new levies and the countermeasures by Canada, Mexico and China.
Chapter 2: How did the stock market react to the U.S. tariffs?
Markets fell sharply earlier in the day, with the Nasdaq even flirting with correction territory, but then recovered somewhat to end the day lower. The Dow led the losses, closing down about 1.6%. The S&P 500 dropped roughly 1.2% and the Nasdaq ended the day about 0.4% lower. Wall Street's fear gauge also picked up after stocks slid today.
With more on the market reaction, I'm joined now by WSJ reporter David Uberti. David, this was quite a day. What was the sentiment in the markets?
It was negative, to say the least. I mean, we are only down roughly 3% on the week across the major indexes. That said, talking to investors today and yesterday, it's very clear that none of them like what is happening right now. There has been a weird dynamic in the market over the last, let's say, four or five months since Donald Trump's election.
Chapter 3: What are Canada and Mexico's responses to the U.S. tariffs?
There has been this expectation and maybe wishful thinking that tariffs are this sort of Das ist eine ziemlich combustible Mischung und deshalb ist alles auf deinem Screen in rot. What were some of the sectors that were hit particularly hard today? That was WSJ-Reporter David Uberti. Thank you, David. Thanks.
As we mentioned, Canada, Mexico and China responded today to the U.S. tariffs. Canadian Prime Minister Justin Trudeau announced retaliatory 25% tariffs on nearly $100 billion of imported U.S. goods, such as alcohol, clothing and household appliances, in two waves. In an address, Trudeau said that Trump was acting in bad faith.
and called the concerns about border security and fentanyl trafficking that Trump used to justify the new tariffs, quote, totally bogus. He said it'll be the American people who will be hit by the effect of the tariffs.
Chapter 4: How are U.S. tariffs affecting international relations?
I want to speak first directly to the American people. We don't want this. We want to work with you as a friend and ally. And we don't want to see you hurt either. But your government has chosen to do this to you.
Meanwhile, Mexican President Claudia Scheinbaum said she plans to announce retaliatory measures on Sunday. In her daily news conference, Scheinbaum said that there was no justification for the tariffs and pushed for cooperation. There is no motive, reason or justification for this decision that will affect our peoples and nations. We have said it in different ways.
Cooperation and coordination, yes. Subordination, interventionism, no. Earlier, China said that it is imposing an additional 15% tariff on US chicken, wheat, corn and cotton products and an additional 10% tariff on other agricultural products, including soybeans, pork, fruit, vegetables and dairy. These would go into effect on March 10th.
Chapter 5: What are China's measures against the U.S. tariffs?
China's Commerce Ministry also said that it added more than two dozen American companies to export control and corporate blacklists. China added that it has also filed a lawsuit with the World Trade Organization against the US's new tariff increase. Joining me now is WSJ Economic Policy Reporter Gavin Bade, who is in the Senate Press Gallery.
So Gavin, how exposed are Mexico and Canada to these tariffs?
Chapter 6: How exposed are Mexico and Canada to the U.S. tariffs?
They are quite exposed right now. I mean, the U.S. is the biggest export market for both Mexico and Canada. So this is all battle stations right now. This is a pretty big economic shock to the entire North American economy, the U.S. included.
Hat die USA eine Antwort auf die anderen Länder, die zu den Tarifen antworten?
Meistens nur, dass sie das weiter kämpfen werden, bis die Fentanyl-Toten runterkommen. Ich meine, es ist sehr schwierig zu wissen, was Trump genau will, um diese Tarife zu lösen. Ich habe gerade mit Senator Bill Hagerty hier im Senat gesprochen, einer von Trumps naheliegendsten Allies. If these tariffs go away, do we have any idea what the effect might be?
Du würdest einen großen Rettungsschein sehen. Du würdest einen Bump in den Stockmarkt sehen. Du würdest eine Menge Rettung in den Versorgungszahlen und Märkten sehen, wenn er einen Deal auf diesen Punkt machen konnte. Aber erinnere dich, das ist nur der erste oder zweite Salvo dieser Handelskriege.
Wir haben eine ganze Menge Tarife nächstes Monat auf alles, von Automobilprodukten bis zu pharmazeutischen Produkten. Und dann hat Trump gestern neue Landwirtschafts-Tarife vorgesehen, über die wir noch keine Erkennung gehört haben. Also kommt hier noch viel mehr.
That was WSJ Economic Policy Reporter Gavin Bade. Thank you, Gavin.
Thanks, Alex.
So, when will consumers feel the effects of tariffs? Not immediately, as Wall Street Journal Data News Editor Anthony DeBarros told our Your Money Briefing podcast.
We would start to expect to see prices on certain items be affected within the next month or so. Now, that said, a lot of companies that import goods spent a lot of money during December and January and February as well to bring in product ahead of the tariffs. So that could mitigate some of the immediate price impacts that we're talking about here.
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