Trump doubles tariffs to 50% on Canadian steel, aluminium

(Sharecast News) - US President Donald Trump on Tuesday said he would double tariffs on Canadian steel and aluminium to 50%, sending global stock markets into turmoil once again. The surprise move is in retaliation for Ontario adding a 25% surcharge on electricity it sends to US states - which itself was a response to the initial tariffs).

Canada was already bracing for the initial 25% levies to take force on Wednesday. In a typically bellicose statement on social media, Trump called Canada "one of the highest tariffing nations anywhere in the world".

Shares were sharply lower on the announcement, with the pan-European Stoxx 600 index plunging 1.71%, Britain's FTSE 100 1.3%, Germany's DAX 1% and France's CAC-40 1.28%.

In the US the Dow Jones was down by 1.13%.

Global markets have been falling over fears that tariffs imposed by Trump will fuel inflation and lead to a recession in the world's largest economy.

The S&P 500 fell 2.7%, the Dow Jones 2% and the tech-heavy Nasdaq 4% on Monday as investors dumped stock in the so-called "magnificent seven" - Alphabet, Amazon, Apple, Microsoft, Meta, Nvidia and Tesla.

Tesla's shares had their worst day in almost five years, falling 15% as investors worry about declining sales.

Trump started a trade war with America's three largest trading partners, increasing tariffs on China by 10% initially before lifting them to 20%. He planned 25% levies on Canada and Mexico but performed a u-turn two days after they came into effect but now claims he will still impose them next month.

"Markets are jittery and volatility seems like the only certainty while the White House pushes hard to usher in a new era, seemingly happy for stock markets to be collateral damage," said Hargreaves Lansdown analyst Matt Britzman.

Ipek Ozkardeskaya, senior market analyst at Swissquote Bank, said the tariff policy was hitting the US more than European peers, "because now we do have a massive budget being unlocked in the European economy".

"There is a growing conviction that the investments into the European defence and technology sectors are just going to rise massively."

Reporting by Frank Prenesti for Sharecast.com