Stock market dips as Trump announces the date 25 percent tariffs on Canadian goods go into effect: How your wallet might be impacted
Wall Street indices dip as President Trump confirms sweeping tariffs that go into effect on Canadian goods next week. Here’s how they might impact your finances.
During an Oval Office meeting with British Prime Minister Keir Starmer, President Donald Trump confirmed that starting next week, tariffs on Canadian goods will go into effect.
The tariffs had been announced soon after the president took office in January but were postponed for a month after talks with the Canadian Prime Minister. Though consumers on both sides of the border and the Canadian government were hoping the import duties could be avoided, Trump said that 25 percent tariffs would be imposed on Tuesday, March 4.
What is a tariff?
A tariff is a tax placed on an imported good. The importer responsible for bringing the products into the country will pay the tax to the U.S. government, based on the price of the shipment. Companies that sell imported products affected by tariffs will have to decide how much of that additional cost they pass along to consumers.
In addition, the president confirmed that on the same day, an additional 10 percent tariff will be applied to Chinese imports to the U.S., on top of the 10 percent that was applied earlier this month.
“Some pain” should be expected, warns President Trump
In the short term, economists agree that tariffs will likely increase prices for consumers. In early February, when the tariffs on Canada and Mexico were initially rolled out, the president said that the public could face “some pain” but did not specify to what extent the taxes would contribute to inflation. However, in his comments today, the president rejected the assertion from the press that consumers and importers often bear the brunt of tariffs. “No, no, I think they are paid for by the country,” argued the president, backtracking on his previous statements.
Evaluating this impact will require more information on the scale of the tariffs planned by the White House. The U.S. imports substantial amounts of crude oil from Canada, and a tax on those products could lead to higher gas prices, as refiners pass along their increased costs to consumers.
Professor Robert Reich, who served as Secretary of Labor during the Clinton Administration estimates that tariffs, if imposed on Canada and Mexico could cost families around $1,200 a year.
Trump says his 25% tariffs on Mexico and Canada — and an additional 10% tariff on China — will take effect on March 4.
— Robert Reich (@RBReich) February 27, 2025
These new tariffs would cost the typical U.S. household an extra $1,200/year.
Other countries won't pay for tariffs — you will. pic.twitter.com/gw0xgoe4v5
Once data on the impact of tariffs on Chinese imports becomes available, economists will be better equipped to model the potential effects of those imposed on Canada. The Bureau of Labor Statistics (BLS) will release the February Consumer Price Index report on Wednesday, March 12, which will be one of the first indicators of how the tariffs imposed by the Trump administration have affected prices.
Additionally, that week the BLS will also release a report on how prices have changed for producers, who will initially bear the cost of the duty and decide how much will be passed along to their customers.
You might be interested in: Trump tariffs: The first three products from Canada that will no longer be exported to the U.S.
Wall Street absorbs the tariff news and dips slightly
Since the announcement was made from the White House by the president earlier on Thursday, the Nasdaq Composite, S&P 500, and the Dow Jones Industrial Average have all fallen. As of Thursday afternoon in New York City, the Nasdaq has taken the biggest hit, dropping by nearly three points.
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