US stocks fell Friday and the S&P 500 slipped from a record high after President Trump slapped Canada with a 35% tariff and threatened higher levies on most other nations.
The S&P 500 plunged 0.4% to 6,253.10 after reaching a new record Thursday of 6,280.46.
The Dow Jones Industrial Average lost 262 points, or 0.6%, and the Nasdaq fell 0.3% by approximately 9:30 a.m. ET.
Trump on Thursday sent Canadian Prime Minister Mark Carney a letter alerting that the US would impose a 35% tariff on Canadian imports starting Aug. 1.
He blamed the levies on a national fentanyl crisis and “Canada’s failure to stop the drugs from pouring into our Country.”
That 35% tariff rate will only jump higher if Canada retaliates, Trump warned.
The president on Thursday also teased that the 10% across-the-board duty looming over most other nations could rise to as much as 20%.
“We’re just going to say all of the remaining countries are going to pay, whether it’s 20% or 15%. We’ll work that out now,” Trump told NBC News’ Kristen Welker.
“I think the tariffs have been very well-received,” he added. “The stock market hit a new high today.”
His fresh tariff threats sent jitters through the stock market as economists have warned the taxes could reheat inflation.
“Stocks are not quite desensitized to tariff headlines just yet. We are still seeing knee-jerk reactions to negative trade headlines,” Michael Landsberg, chief investment officer at Landsberg Bennett Private Wealth Management, said in a note Friday.
Including Canada, Trump has notified at least 23 countries of incoming tariff rates as they approach an August deadline after a 90-day pause was put in place to allow time for negotiations.
Canada, however, is by far the largest trading partner to receive one of these letters, trading an estimated $762.1 billion in goods last year with the US, according to the Office of the US Trade Representative.
Trump has called the US trade deficit with its northern neighbor – estimated at $63.3 billion in 2024 – a “major threat.”
Later on Thursday, Carney said Canadian officials would work with their US counterparts to reach a deal before the fast-approaching deadline.
