Canada and Mexico hit back against trade tariffs imposed by US President Donald Trump, and investors are bracing for stock market falls on Monday.
Analysts noted the trading on the brokerage IG’s weekend markets indicated shares were likely to fall on Monday after the US president signed an order on Saturday to bring in sweeping tariffs this week, a move that could prompt a trade war with some of the US largest trading partners.
The stocks of technology are expected to be hit, and the US’s Nasdaq index is on track to fall by 1.4% at the start of trading on Monday, according to IG. The official futures market opens on Sunday evening.
The index of Dow Jones one of the 30 large US companies looked likely to fall by 0.8%, while the UK’s FTSE 100, which ended last week at a record high, was on track for a 0.7% drop.
The Guardian quoted IG analyst Tony Sycamore saying: “The surprise for markets today isn’t so much Trump’s tariff announcements – largely as flagged. It’s that Canada and Mexico retaliated immediately and that others, ie China and the EU, may follow their lead, resulting in a sharp contraction in global trade.”
As per new US tariffs, Canadian and Mexican exports to the US will face a 25% tariff starting on Tuesday, and there will be a 10% levy on energy resources from Canada.
President Trump said the move was in response to a “major threat” from illegal immigration and drugs, and demanded both countries staunch the flow of fentanyl and illegal immigrants.
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