What happened?

Trump made good on his words and invoked emergency powers late last night to see the 25% tariffs on most imports from Canada and Mexico go live, plus a 10% levy on Chinese goods, bypassing Congress. He did so via executive order, bypassing Congress, which he justified by alleging these nations enabling the US fentanyl crisis.

Source: Bloomberg Note: Future dates subject to change; for tariffs targeting digital taxes, date hasn’t yet been set.

Why does this matter?

  • Market panic: tariffs could shave 1-2% off US GDP, with deeper pain for Canada and Mexico. Equities face a sharp selloff unless the measures are reversed.
  • Retaliation escalates: Ontario threatened to cut power to 1.5 million New Yorkers, while Mexico and China plan counter-tariffs on US agriculture and tech.

What’s the caveat?

  • A last-minute reversal remains possible—past Trump tariffs often saw 11th-hour walkbacks.
  • Some firms, like Honda, are accelerating US production shifts to dodge duties, softening the blow.
finformant view Markets have grown numb to tariff threats, but these measures—if sustained—risk a substantial S&P 500 plunge. Even a reversal would likely only trigger a fleeting rally, as investors now price in prolonged trade volatility.
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