Live updates: U.S. tariffs on Canada, Mexico and China take effect, triggering trade war
A truck crosses the border crossing between Windsor, Ontario, Canada, and Detroit, Michigan, on March 1, 2025.GEOFF ROBINS/AFP/Getty Images
5:40 a.m.
Premarket: Global stocks, bond yields slide as U.S. tariffs ignite new trade battle
– Reuters
Stocks and bond yields slid on Tuesday as investors globally ducked for cover after the United States hit Canada, Mexico and China with steep tariffs.
European stocks slid 1 per cent, falling back from record highs, with shares of automakers, vulnerable to trade duties, losing 3 per cent. Aerospace and defense stocks hit a record high, however.
Government bond yields fell. U.S. 10-year Treasury yields dropped to their lowest since October at 4.115 per cent, while yields on German 10-year bonds, a benchmark for the euro zone, also slid.
Other riskier assets lost ground too, with bitcoin slipping under $84,000, erasing a surge at the start of the week. The risk-sensitive Australian dollar fell, too.
MSCI world equity index, which tracks shares in 47 countries, fell 0.2 per cent.
Still, U.S. futures gained almost 0.3 per cent, signaling the sell-off may peter out globally. The S&P 500 is down about 5 per cent from its February 19 all-time closing high as tariffs exacerbate concerns about growth.
Investors were also unnerved by U.S. President Donald Trump pausing military aid to Ukraine following his clash with Ukrainian President Volodymyr Zelenskiy last week, deepening the fissure that has opened between the one-time allies.
The Canadian dollar and Mexican peso weakened, while the Aussie dollar sank to a one-month low.
5:37 a.m.
European stocks slump as Trump tariffs kick in
– Eric Reguly
European markets lost ground on Tuesday morning after having soared the day before, when defence companies rallied in London, Paris, Frankfurt and Milan on the prospect of Europe stepping up the transfer of weapons to Ukraine to fill the hole left by the United States.
Spooked by the global trade war unleashed by U.S. President Donald Trump, and the possibility that Europe too could soon face a barrage of punishing American tariffs, the main European stock indices sank from their record highs set on Monday.
Germany’s DAX index was the worst hit by late morning, European time, with a fall of almost 2 per cent. London’s FTSE-100 fared somewhat better, with a loss of just under 0.5 per cent. France’s CAC 40 lost 1.2 per cent.
Among the biggest losers were the car companies, whose North American operations could get damaged by the 25 per cent tariffs on Canada and Mexico that began early Tuesday. Stellantis, BMW, Mercedes, Renault, Porsche and Volkswagen were all down by between 2 per cent and 6 per cent.
Oil prices also went into reverse, with Brent Crude, the international benchmark, down 1.3 per cent in London trading. The downturn in prices – Brent is down 15 per cent in the last 12 months – came after the OPEC-Plus group of producers, which includes Russia, signaled plans to boost supply. Oil investors also feared that the global trade war could reduce economic growth everywhere, pushing down energy demand.
Bond yields are fell across Europe as prices rose (yields and prices move in opposite directions) as investors sought the relative security of government-issued debt.
Some stocks defied the slump. Leonardo of Italy, one of the world’s biggest defence contractors, rose 1.4 per cent on the Milan bourse after having climbed 17 per cent on Monday, taking its one-year return to almost 125 per cent. The defence companies’ rally came after the White House on Monday announced a pause in U.S. weapons sales to Ukraine, which should translate into extra orders for European suppliers of everything from missiles to artillery shells.
3:07 a.m.
China hits back with measures targeting agricultural products
– James Griffiths
Ships and containers are shrouded in fog at the Yangshan Deepwater Port in Shanghai on Feb. 16, 2025.-/AFP/Getty Images
Minutes after new U.S. tariffs came into force against a slate of Chinese goods Tuesday, Beijing responded by imposing 10-15 per cent levies against U.S. agricultural and foodstuffs.
Additional 15 per cent tariffs will be imposed on U.S. chicken, wheat, corn and cotton imported into China, while sorghum, soybean, pork, beef, and other foodstuffs will be subject to a 10 per cent tariff, China’s State Council said in a statement.
Speaking to reporters, Chinese Foreign Ministry spokesperson Lin Jian said Beijing “will play along to the end” if Washington is intent on waging a trade war.
In addition to the new tariffs announced Tuesday, China also placed 25 U.S. firms under export and investment restrictions on national security grounds.
The measures were in response to a new 10 per cent tariff on all Chinese goods imposed by President Donald Trump late Monday, on top of existing across-the-board 10 per cent tariffs his administration has enacted against China since coming to power in January.
Read more here: China hits back against U.S. tariffs with measures targeting agricultural products
12:01 a.m.
U.S. triggers trade war with tariffs on Canada, Mexico
– Kate Helmore and Pippa Norman
From left, U.S. President Donald Trump, Canadian Prime Minister Justin Trudeau, China’s President Xi Jinping, and Mexico’s President Claudia Sheinbaum.The Associated Press
U.S. President Donald Trump launched a trade war with Canada at 12:01 a.m. Tuesday morning, citing a threat to national security posed by “unchecked drug trafficking.”
The U.S. is now imposing 25 per cent tariffs on Canadian goods, with a 10 per cent tariff on energy and critical minerals.
Prime Minister Justin Trudeau has vowed to retaliate, hitting back with $30-billion in tariffs on U.S. goods, rising to $155-billion in 21 days. These measures took effect at the same time as the U.S. tariffs.
Early Tuesday morning, trucks lined up on either side of the Ambassador Bridge, the main artery between Windsor, Ont., and Detroit. It is the busiest international crossing in North America. Every day, about $329-million worth of products cross the Detroit River, from vegetables to automotive parts. It handles about one third of all trade between the two countries.
The next 24 hours promises to be confusing and chaotic for this border crossing and those living on either side.
The move from Mr. Trump upends the free trade that has benefited both Canada’s largest industries and its everyday consumers.
March 3, 10:15 p.m.
Trudeau announces countertariffs
– Laura Stone and Steven Chase
Prime Minister Justin Trudeau speaks during a news conference Feb. 1, 2025 on Parliament Hill in Ottawa.DAVE CHAN/AFP/Getty Images
The announcement, after months of economic threats from Mr. Trump, prompted a response from Mr. Trudeau hours later. He said in a statement Monday evening that Canada would retaliate with its own tariffs on billions of dollars in American goods, setting the stage for a major trade war between this country and its largest trading partner.
The retaliatory tariffs, Mr. Trudeau said, would take effect at 12:01 a.m. ET on Tuesday morning if the U.S. tariffs were in effect. He defended Canada’s actions on the border and its work to stem the flow of fentanyl into the U.S.
“Let me be unequivocally clear – there is no justification for these actions,” he said, referring to the U.S. tariffs.
Mr. Trudeau is expected to address Canadians Tuesday morning to detail the retaliatory measures. His statement says they will initially apply to $30-billion in U.S. goods, rising to $155-billion in 21 days.
March 3, 3:00 p.m.
Trump says no room left for a deal, U.S. will impose 25% tariffs on Canadian and Mexican goods
– Laura Stone and Steven Chase
U.S. President Donald Trump is shown signing an executive order in the Oval Office at the White House on Feb. 25, 2025 in Washington, DC.Alex Wong/Getty Images
U.S. President Donald Trump says his government will impose 25-per-cent tariffs on Canadian and Mexican goods starting Tuesday, saying there is no room left for either country to make a deal to avoid the punishing levies.
Speaking to reporters at the White House Monday, Mr. Trump confirmed the 25-per-cent tariffs will go ahead as planned beginning Tuesday, adding the countries will need to build car plants and other items in America in order to relieve the levies.
The President also said reciprocal tariffs will take effect on April 2.
Read more: Trump says 25% tariffs on Canadian and Mexican goods take effect tomorrow