A major sell-off of stocks on Wall Street continued Tuesday on the heels of an intensifying trade war between the U.S. and Canada.
The Dow Jones Industrial Average was down about 500 points and surpassed losses of 1% in midday trading, while the S&P 500 was down about 0.7% since markets opened. Meanwhile, the Nasdaq Composite index — often used as an indicator of growth in the technology sector — saw moderate periods of both growth and decline.
This comes a day after the three major U.S. indexes continued to skid amid rising economic fears and talk of a potential recession on the horizon. A recession is broadly defined as two consecutive quarters of decline in the U.S. Gross Domestic Product, or the total value of goods and services produced.
There are also growing concerns over the threats of additional tariffs on major U.S. trade partners as President Donald Trump warns of an economic "transition period" ahead.
President Trump announced Tuesday that he will double his planned tariffs on Canadian steel and aluminum from 25% to 50%. He said on social media that the increase of the tariffs set to take effect on Wednesday is a response to the price increases that the provincial government of Ontario put on electricity sold to the United States.
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President Trump has given a variety of explanations for the trade war with Canada, insisting the country needs to do more to stop the flow of fentanyl into the U.S. while also saying the tariffs are in response to Canada placing high taxes on dairy imports that negatively impact U.S. farmers.
Trump was set to deliver a Tuesday afternoon address to the Business Roundtable, a trade association of CEOs that he wooed on the campaign trail with the promise of lower corporate tax rates. But his tariffs on Canada, Mexico, China, steel, aluminum — with plans for more to possibly come on Europe, Brazil, South Korea, pharmaceutical drugs, copper, lumber and computer chips — would amount to a massive tax hike.
