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The stock markets fall after the US tariff raises fears of the trade war

Jennifer Maerhans

Business correspondent, BBC News

Getty Images The merchants operate on the ground of the New York Stock Exchange during the morning trading on February 01, 2025 in New York CityGety pictures

Stock markets have declined all over the world after a tariff by President Donald Trump was brought into the goods entering the United States from China, Canada and Mexico.

Trump imposed a 25 % tariff on imports from Canada and Mexico, and 20 % tariffs against China.

Canada and China have announced their own taxes on American goods, while Mexico said it was “plans for emergency”, which raised concerns about the full trade war.

The three main securities market indicators in the United States were drowned after the news, while the FTSE 100 index is one of the largest listed companies in the United Kingdom opened less on Tuesday, and stock markets decreased in Asia.

Analysts have warned that the customs tariff would increase prices for American families and can have an impact on consumers worldwide, including in the UK.

It is possible that the CEO of US retail stores will see the goal that shoppers are likely to see an increase in prices during the next two days.

Brian Cornell told CNBC foods, including strawberries, avocado and bananas, may rise.

Jim Farley, CEO of Ford, warned last month that the company “could deal with two weeks of customs tariffs.”

Bloomberg said: “We can see billions of billions of dollars from pressure on the industry, lost functions, and many effects on societies.”

Trump threatened to impose customs duties, which is an added tax into a product when a country – in Canada, Mexico and China in response to allegations is the unacceptable flow of illegal drugs and illegal immigrants to the United States.

But Canadian Prime Minister Justin Trudeau said that his country is responsible for less than 1 % of fentanel enters the United States and will take revenge by 25 % of US commodities worth $ 150 billion.

There is no justification for [the US’s] Trudeau said in a statement on Monday that the procedures will not let this unjustified decision without an answer.

He said that Canada will first target $ 30 billion products, targeting $ 125 billion over 21 days.

He said that any new duties imposed by Canada will work “until the American trade procedure is withdrawn,” adding that his country will follow “non -fire measures” in the event that the American tariffs do not stop – without specifying what these measures are.

“Trade War”

China has quickly declared its counter-measures, which includes a 10-15 % tariff for some American agricultural commodities, including wheat, corn, beef and soybeans. China is the largest US buyer of these goods.

“If the United States continues … to launch a war of tariffs, trade war, or any other type of war, the Chinese team will fight them until the bitter end,” said Foreign Ministry spokesman Lin Jian.

Before the appearance of American definitions on Mexican imports into effect, President Claudia Shinbom said that her country has emergency plans.

And she said: “In this case, we need a composure, serenity, and patience. We have a plan A, Plan B, Plan C, and Even Plan D.”

Shinbom said she would talk more about Mexico’s response on Tuesday.

In the United States, Dow Jones closed a 1.5 % lower S&P 500 today, a 1.8 % decrease on Monday, while in Asia on Tuesday, Nikkei 225 closed 1.2 % less and the Hang Seng index ended 0.3 %.

FTSE 100 in London was lower in early trading while the main stock exchanges in Germany and France also fell.

Trump has argued that the definitions will enhance us from manufacturing and protecting jobs, as well as raising tax revenues and developing the economy.

However, these measures can have harmful effects on both consumers and companies – including those that they have identified for protection.

Shoppers can be the ones who bear the bulk of the tariffs in the form of higher prices, if they are transferred, as well as a lower choice.

At the same time, definitions tend to take revenge on the targeted countries, as local companies that are looking to export goods decrease, which means that measures can hinder trade in the end, the functions that are created and economic growth.

“Global Economic Risks”

Goods worth $ 2 billion cross the borders of the United States, Canada and Mexico every day, and their economies are deeply integrated.

With the introduction of definitions on this border trade, companies that import goods may decide to transfer some or all additional costs to consumers by raising prices.

They can also reduce imports, which means fewer products and thus high demand, which may also increase prices.

Andrew Wilson, of the International Chamber of Commerce, said: “What we see is the largest effective increase in American definitions since the 1940s – with severe economic risks related to that,” said Andrew Wilson, of the International Chamber of Commerce.

“The initial market movements completely reflect that we are now entering into a very risky scenario for global trade and global economy,” BBC Radio 4 said today.

He said that Yale University predicted that these measures may cost American families in the region of $ 2000 this year alone.

The price rises

I suggest an analysis from TD ECONOCS The price can rise by cars About $ 3000.

This is because the parts cross the United States, the Canadian and Mexican borders several times before assembling the car.

American consumers can also see the price of avocado rising as Mexican avocado constitute about 90 % of the American avocado market every year.

The maple syrup industry in Canada represents $ 75 % of the production of the entire maple syrup in the world so that American families can see high candy.

“In terms of consumers, you are more likely to search in the short term, increasing in prices with companies passing through some of these prices on the consumer,” Ella Huxa, the Newton’s fixed income, to invest in investment management.

“It is a major challenge to British business due to the historical ties linking the United Kingdom and the United States. [We are] Seeing something like dismantling an alliance through the Atlantic between the United States and Europe.

“However, there is a real feeling of hope for a stronger relationship in the United Kingdom and China.”

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