President Donald Trump has paused tariffs on Mexico after a conversation with Mexican President Claudia Sheinbaum. This decision provided some relief to the Dow and S&P 500, which had fallen earlier in the trading session due to rising uncertainty from new tariffs. The Dow Jones Industrial Average initially fell by about 150 points or 0.35%.
The S&P 500 dropped 0.7%, and the Nasdaq decreased by 1%. Shares of U.S. auto companies with ties to suppliers in Canada and Mexico, such as General Motors and Ford, also took a hit. The market downturn extended globally, with Japan’s Nikkei index falling by 2.5% and the pan-European STOXX 600 dropping approximately 1%.
Trump halts tariffs, market rebounds
In response to the tariffs, Canadian Prime Minister Justin Trudeau announced that Canada would implement 25% tariffs on $155 billion worth of U.S. goods. Mexican President Claudia Sheinbaum declared a “Plan B” to defend Mexico’s interests.
The tariffs could lead to increased prices for products like avocados, tequila, and gasoline. Potential retaliatory tariffs from Canada and Mexico also pose a risk to U.S. exporters. Trump defended the tariffs, citing a need to address illicit drugs coming into the U.S. from Canada, Mexico, and China.
He acknowledged possible financial hardship within the U.S. but stressed his commitment to “Making America Great Again.”
The temporary pause on tariffs for Mexico has provided some relief to the U.S. stock market, though concerns about international trade tensions remain.
