WASHINGTON — Stocks plunged Friday after President Trump floated a 35% tariff on Canadian goods not governed by the USMCA trade pact — while threatening a new dictated levy on the European Union.
The Dow Jones Industrial Average fell 279 points, or about .63% — with narrower losses by the S&P 500, which had notched a record high Thursday, and the Nasdaq composite.
The slouch was slight compared to the market reaction to Trump’s initial “Liberation Day” announcement of “reciprocal” tariffs on April 2.
Most trade with Canada, America’s second-largest trading partner behind Mexico, is governed by the deal that Trump brokered in his first term, but the remaining items would be hit with the 35% rate, Trump wrote on social media Thursday.
“Instead of working with the United States, Canada retaliated with its own Tariffs,” he wrote. “Starting August 1, 2025, we will charge Canada a Tariff of 35% on Canadian products sent into the United States, separate from all Sectoral Tariffs.”
Trump told NBC in a phone interview that the EU, which he has threatened with a 50% tariff beginning Aug. 1, will shortly receive a letter identifying a revised rate.
Throughout the past week, Trump has sent other target nations letters with revised figures, in most cases keeping the rates identical or close to those stated in April — such as 25% against Japan and South Korea.
In one notable exception, Trump bumped up Brazil’s looming tariff from 10% to 50% in protest of the country’s “witch hunt” against its former President Jair Bolsonaro and over censorship of US social media platforms such as X.
Trump previously revised his threatened tariffs on the EU from 20% to 50% in protest of the trade bloc’s digital services tax on American companies such as Google and Facebook.
“I think the tariffs have been very well received. The stock market hit a new high today,” Trump told NBC.
“Not everybody has to get a letter. You know that. We’re just setting our tariffs,” he said, adding that the EU and Canada could expect letters “today or tomorrow,” though the missives had not been published as of 6 p.m. Friday.
“I’d like to do it today,” Trump said Thursday. “I’m talking European Union, which is, as you know, many countries, and Canada. We’ll be putting them out over the next couple of hours.”
The president threatened the tariffs in a bid to force new trade deals that break down barriers to American exports — initially giving other countries a July 9 deadline — and has spoken approvingly of the impact of tariffs historically on shielding US industry and raising government revenue.
His administration has reached preliminary deals with the UK, China and Vietnam and announced a “roadmap” forward with India.
