U.S. Stocks Tumble Amid Tariff Concerns on the Global Economy

What Happened?

U.S. stocks have recently taken a tumble as investors continued a steep sell-off amid President Donald Trump’s tariffs and their potential impact.

All three major indexes opened lower Monday after Trump wouldn't rule out a recession.

'I hate to predict things like that,' Trump told Fox News during an interview that aired Sunday. 'There is a period of transition because what we’re doing is very big. We're bringing wealth back to America. That's a big thing… it takes a little time, but I think it should be great for us.'

Economists at Goldman Sachs have raised the expectations of a recession within the next 12 months to 20% from 15%, citing policy changes out of Washington.

JP Morgan economists forecast the probability of a U.S. and global recession at 35%.

Business leaders are monitoring developments as the Trump administration's tariff measures have been delayed or adjusted causing much market instability.

Why it Matters

Trump warned he may implement tariffs on Canadian dairy and lumber citing Canada’s roughly 250% tariff on dairy imports from the U.S.

He added America would match those tariffs dollar-for-dollar as both sides engage in a brewing trade war.

Canadian Prime Minister Justin Trudeau anticipates the trade war to be ongoing 'for the foreseeable future.'

But Trump announced a one-month exemption on auto tariffs against Canada and Mexico in compliance with the United States-Mexico-Canada Trade Agreement (USMCA).

Other Mexican products in compliance with the agreement were also extended as an accommodation until April 2.

The extended measures end around the same time Trump has pledged to implement reciprocal tariffs on all major U.S. trading partners, including allies.

Ontario Premier Doug Ford recently told reporters that Canada won’t remove any of its retaliatory tariff measures unless all the U.S. tariffs are removed.

Should the U.S. carry out the 25% measure on Canadian imports, it could push Canada into a 2025 recession.

The move would cause a sharp spike in inflation, and force the Bank of Canada to hold rates higher next year, according to Oxford Economics.

China has implemented retaliatory measures on U.S. farm exports amid 20% tariffs imposed by President Trump on Chinese imports.

How it Affects You

Trump has vowed to reduce the U.S. trade deficit, which hit a record high of $131.4 billion in January.

Some like chief investment officer David Bahnsen believe that 'the talk of tariffs is, in a lot of ways, worse than the implementation of them.'

Should the impacts only be temporary, American consumers could still experience a sharp rise in price inflation.

This could also have a significant impact on the construction industry if Canadian lumber imports are raised.