U.S. stocks plunged in Monday trading after President Donald Trump's tariffs on Canada, Mexico and China triggered fears of a broad trade war and a hit to global growth.
Big tech stocks sank in Monday trading. Tesla fell 6%; Nvidia fell 5%; TSMC fell 4.3%; Apple fell 2.5%; Micron, Broadcom fell 2.3%; Alphabet fell 1%.
Trump slapped Canada and Mexico with duties of 25% and China with a 10% levy at the weekend, calling them necessary to combat the flow of migrants and fentanyl into the U.S..
Canada and Mexico immediately vowed retaliatory measures, and China said it would challenge Trump's levies at the World Trade Organization.
The tariffs, outlined in three executive orders, are due to take effect at 12:01 a.m. ET (0501 GMT) on Tuesday.
Trump's move was the first strike in what could usher in a destructive global trade war and drive a surge in U.S. inflation that would "come even faster and be larger than we initially expected," said Paul Ashworth of Capital Economics.
A model gauging the economic impact of Trump's tariff plan from EY chief economist Greg Daco suggests it would reduce U.S. economic growth by 1.5 percentage points this year, throw Canada and Mexico into recession and usher in "stagflation" at home.
Barclays strategists previously estimated that the tariffs could create a 2.8% drag on S&P 500 company earnings, including the projected fallout from retaliatory measures from the targeted countries.
