Trump’s New Tariff Order on Canadian Imports Sends Shockwaves Through the Stock Market

The 25% hike in tariffs on Canadian steel and aluminum fuels recession fears and corporate uncertainty, contributing to steep losses in U.S. stocks and corporate downgrades.

Trump’s New Tariff Order on Canadian Imports Sends Shockwaves Through the Stock Market

U.S. stocks continued their downward slide on Tuesday, extending the losses from Monday, as President Donald Trump’s recent tariff order on Canadian imports added to growing recession concerns. Investors are already on edge due to slowing consumer confidence, and the market’s response to the tariff announcement added more volatility to an already fragile economic outlook.

In a move that immediately impacted stock prices, Trump confirmed Tuesday that his administration would impose an additional 25% tariff on Canadian steel and aluminum imports. This new levy, set to bring the total tariff to 50%, is a direct response to a decision by Ontario’s government to implement a 25% tax on electricity exports to the U.S. Trump’s move is seen as retaliation, and it comes at a time when his recent remarks on a potential recession have only fueled investor anxiety.

Economic Uncertainty Drives Market Decline

The steep losses on Monday were compounded by Trump’s comments during an interview, where he refrained from ruling out the possibility of a U.S. recession in 2025. Although he downplayed the notion, calling it merely a “period of transition,” his remarks added to the growing unease among investors, especially with corporate America beginning to echo the same warnings.

Around 10:07 a.m. ET on Tuesday, the broad S&P 500 index dropped 0.32%, or 17.8 points, to 5,596.76, with the blue-chip Dow losing 0.79%, or 332.34 points, to 41,579.37. Meanwhile, the tech-heavy Nasdaq managed to edge up by 0.11%, or 19.76 points, to 17,488.08, although it remains 10% below its all-time high—placing it in correction territory.

The market’s downward trend reflects broader fears about the state of consumer-driven economic growth. Companies like retail giant Walmart, Delta Airlines, and Dick’s Sporting Goods have all warned that consumers are pulling back on spending. As the economy slows, the stock market is experiencing a volatile reaction, particularly with some of the biggest names in the industry now facing downgrades.

Corporate News: A Mixed Bag of Struggles and Gains

Tuesday’s corporate news painted a bleak picture for several industries. Tech giant Oracle reported disappointing earnings, which caused its shares to drop 3.35%. Similarly, Delta Air Lines, which had already reduced its outlook, saw a 3.7% dip in shares after cutting its forecast due to weakening consumer and corporate confidence.

American Airlines’ announcement of a wider-than-expected loss in the first quarter sent its stock tumbling 2.32%. The airline attributed the poor outlook to a softening domestic leisure segment, particularly in March. Similarly, Dick’s Sporting Goods, despite topping earnings estimates, warned of slower comparable sales growth for the year, causing a 1.54% decline in its stock.

In contrast, Southwest Airlines’ decision to charge for checked bags, a shift away from its two-free-bag policy, was well-received by investors, with shares jumping 8.48%. Tesla also saw a modest recovery, gaining 2.66% after President Trump pledged on social media to purchase a new Tesla in support of CEO Elon Musk, whose leadership in government efficiency initiatives has gained attention.

Retailer Kohl’s, however, suffered a significant blow after missing earnings expectations, with its shares plummeting 16.43%. Additionally, Illumina, the maker of genetic sequencing machines, saw its stock rise by almost 3% after it lowered its 2025 financial guidance, prompted by China’s decision to ban sales of its devices.

Cryptocurrency and the Broader Financial Landscape

The cryptocurrency market also saw volatility as Bitcoin rebounded above the key $80,000 mark after facing a tough few weeks. However, analysts warned that the pressure on digital assets would likely continue, as investors remain cautious amid heightened market instability. As of early Tuesday, Bitcoin was up 2.29%, trading at $80,551.94.

As uncertainty looms in both the traditional financial markets and the cryptocurrency sector, it’s clear that the impact of Trump’s new tariff policies will continue to weigh heavily on the economic landscape. Investors are watching closely as the market grapples with rising concerns over a potential recession, falling consumer confidence, and now, the added pressure from international trade tensions.