President Donald Trump's steep tariffs, set to begin Tuesday on America's biggest trading partners, roiled markets around the world until it was announced some would be delayed.
Agreements were reached with Mexico and Canada to pause a 25% tariff for one month, as well as a 10% tariff on Canadian energy products, officials said. A 10% tariff on China was still in place.
The dollar strengthened, oil prices rose and major stock indexes in the U.S. fell at the start of trading on Monday before the tariffs were delayed, The New York Times reported. Markets in Asia and Europe also fell.
The S&P 500 and Nasdaq regained some losses after Mexico's president, Claudia Sheinbaum, said the tariffs would be paused while border patrols are boosted. The peso and Canadian dollar also recovered.
Later on Monday, it was announced that tariffs on Canada would be delayed by 30 days so a border deal could be negotiated. Trump has said the three countries aren't doing enough to curtail undocumented immigrants and fentanyl coming into the U.S.
Shares of companies in the auto, industrial, retail and beverage industries with international supply chains were hit particularly hard on Monday, CNBC reported. Silicon Valley chip company Nvidia, Apple and other major tech companies also fell, per The Times.
"The uncertainty at this stage is tremendous — not only of how these eventual negotiations will play out, but worries about how this is only the tip of the iceberg and more tariffs are on the horizon," Yung-Yu Ma, chief investment strategist for BMO Wealth Management, told The Times.
Leaders in Canada and Mexico had said they planned to retaliate with tariffs on U.S. goods, raising the prospect of an all-out trade war that investors fear could cause rising inflation. China planned to file a complaint with the World Trade Organization over the tariffs and consider retaliatory action, The Times reported.
Economists say tariffs could lead to rising costs on a wide range of items the U.S. receives from the three nations: vehicles, gas, fruits and vegetables, computers, children's toys, household appliances and more. Companies that pay the tariffs often pass them on to consumers.
Trump has said he "can't guarantee" tariffs won't raise prices for Americans, and he doubled down on that sentiment on Sunday.
"WILL THERE BE SOME PAIN?" he posted on social media. "YES, MAYBE (AND MAYBE NOT!) BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID."
Trump told the BBC on Sunday that tariffs "will definitely happen with the European Union" ... "pretty soon." Other nations threatened with tariffs in recent weeks include Russia, Denmark and Colombia.
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