Trump Tariffs On Canada, Mexico, China To Begin Saturday: Stocks Fall, Dollar Rises

Major Wall Street indices pared most of their gains on Friday after the White House reportedly announced that President Donald Trump would implement significant tariffs on Mexico, Canada, and China on Saturday.

According to a CNBC report, White House Press Secretary Karoline Leavitt briefed the press stating that Trump will be implementing 25% tariffs on Mexico and Canada and a 10% duty on China in retaliation for “the illegal fentanyl that they have sourced and allowed to distribute into our country.”

It is not yet clear how these levies are to be imposed.

“These are promises made and promises kept by the president,” Leavitt said, according to the report.

Following the development, the S&P 500 and the Dow Jones dipped into the red while the Nasdaq Composite pared most of the gains recorded in the morning. The dollar index, which measures the value of the U.S. dollar relative to a basket of the top six currencies, rose 0.5% to trade at 108.38.

One of the biggest concerns surrounding the tariffs is the potential resurfacing of inflation when it appears to be nearing the Federal Reserve’s targeted rate. Fed Governor Michelle Bowman reportedly said it would be very important to have a better sense of the actual policies and how they will be implemented and greater confidence about how the economy will respond.

“If the president at any time decides to roll back those tariffs, I’ll leave it to him to make that decision. But starting tomorrow, those tariffs will be in place,” Leavitt said.

The SPDR S&P 500 ETF Trust (SPY) traded 0.28% lower, while the Invesco QQQ Trust, Series 1 (QQQ) pared some of its gains to trade nearly 0.2% higher. Retail sentiment on Stocktwits ranged from ‘bearish’ to ‘neutral’ for these ETFs.

SPY’s Sentiment Meter and Message Volume as of 2:14 p.m. ET on Jan. 31, 2025 | Source: Stocktwits QQQ’s Sentiment Meter and Message Volume as of 2:15 p.m. ET on Jan. 31, 2025 | Source: Stocktwits

Retail chatter on Stocktwits reflected skepticism among investors.

Although the market appears rattled now, investors are also awaiting granular details about the tariffs and any possible exemptions.

Until then, markets are expected to remain skeptical of the announcement.

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