By Solomon 
Trump’s new tariffs on Canada, Mexico, and China are shaking up the markets, with Wall Street feeling the heat. On Tuesday, the S&P 500 dropped 1.7%, the Nasdaq fell 1.5%, and the Dow Jones went down 1.8%. This comes after President Trump announced 25% tariffs on nearly all goods from Mexico and Canada, plus 10% on Chinese imports.
Investors had hoped the tariffs were just a negotiation tactic, but now it’s clear they’re here to stay — and that’s making markets nervous. Retailers like Target and Best Buy have already warned that the higher costs will likely be passed on to consumers, which could push inflation up.
China isn’t taking the tariffs lightly either. They’ve hit back with tariffs on U.S. farm products like soy, beef, and corn — potentially shifting those orders to South America instead. Analysts are calling the whole situation a “lose-lose” scenario, with no clear winner.
Treasury Secretary Scott Bessent tried to calm fears, saying the government is focused on helping small businesses and consumers rather than Wall Street. But that hasn’t stopped big companies from feeling the pinch. Target’s shares dropped over 6% after reporting lower holiday quarter sales and warning of more pressure from tariffs.
The markets had been doing well recently, partly because of hopes that Trump’s policies would boost the economy. But with inflation expected to rise and supply chains under strain, those hopes are fading fast. Analysts predict U.S. inflation could climb by as much as 2.1%, which might force the Federal Reserve to keep interest rates higher for longer.