U.S. stocks sank and the Canadian dollar fell further in early trading on Monday morning against the backdrop of a brewing North American trade war, then rebounded mid-morning after Mexican President Claudia Sheinbaum announced that U.S. tariffs against her country would be delayed by one month.
President Donald Trump announced on Saturday that extensive tariffs on Canadian and Mexican goods would be implemented Tuesday. Canada retaliated with its own tariffs after Trump’s executive order, which imposes a 25 per cent tariff on Canadian goods and a 10 per cent tariff on Canadian oil.
Opening market reaction in the U.S. saw the S&P 500 down 1.7 per cent, while the tech-centric Nasdaq composite tumbled 2.1 per cent. The Dow Jones Industrial Average fell 557 points in early trading.
By 10:30 a.m. ET, some of those losses had been recovered, with the Dow Jones down 233 points, the Nasdaq 1.4 per cent lower and the S&P 500 down one per cent.
The TSX was down 442.81 points. The Canadian dollar also fell to its lowest level against the U.S. dollar in more than two decades on Monday, trading at $68.13 US compared to $69.04 US on Friday afternoon.
After a phone call with Trump, Sheinbaum wrote on social media platform X that the tariffs against Mexico had been delayed by one month.
Writing on his Truth Social platform Monday morning, Trump said that he spoke with Prime Minister Justin Trudeau early today and had scheduled another call with Trudeau for later this afternoon.