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US President Donald Trump is aiming to reshape the country’s trade policy using one of his preferred economic tools: tariffs.
Over the weekend, Trump announced tariffs to take effect beginning on Tuesday — 25% on imports from Canada and Mexico, and 10% on imports from China.
Subsequent conversations with the leaders of both Mexico and Canada yielded apparent progress: Trump delayed tariffs on both countries by one month. Duties on China went into effect Tuesday, and China retaliated — though Trump is planning to soon speak with Chinese President Xi Jinping, leaving hope for a potential compromise.
The trade posturing will have ramifications for the US’s relationships with some of its closest allies and biggest trade partners. They could also have ramifications for inflation, with the potential to push prices higher. That, in turn, could influence where the Federal Reserve takes interest rates in the coming months — and years.
Read more: What are tariffs, and how do they affect you?
Yahoo Finance will chronicle the latest news and updates from the threats to the eventual policy.
LIVE 57 updates
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Retail analyst: Investors are focusing on tariffs too much
Tariffs have become a major buzzword on retail companies’ earnings calls. But on a recent episode of Yahoo Finance’s Opening Bid podcast, BMO Capital Markets retail analyst Simeon Siegel argued investors’ emphasis on tariffs may be overdone, Yahoo Finance’s Grace Williams writes.
“We’re focusing on tariffs too much,” Siegel told Yahoo Finance Executive Editor Brian Sozzi. “From a pure business perspective, a tariff is just a cost input going up.”
Siegel covered retail during the first Trump administration when tariffs impacted the medical, solar, and steel industries. However, this time around, tariffs are expected to substantially affect retailers.
Tariffs have sent retail execs at Gap (GAP), Polo Ralph Lauren (RL), Williams Sonoma (WSM), and others to sourcing out of China to contain costs.
“It’s a pressure point,” Ralph Lauren CEO Patrice Louvet told Sozzi at the World Economic Forum in late January. “But again, I think we can work through it, and we can manage it.”
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Trump tariffs are already having an impact on Canada: BOC gov.
Reuters reports:
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The impact of tariffs on Canada, Mexico, and China on inflation
A new paper from the Boston Fed’s Omar Barbiero and Hillary Stein estimates President Trump’s tariffs on Canada, Mexico, and China could raise core inflation by 0.5 to 0.8 percentage points.
The analysis factored in price changes for direct imports as well as imported components. From the authors:
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Trump’s USTR pick faces bipartisan questioning on trade whiplash
Yahoo Finance’s Ben Werschkul provides an update on US Trade Representative (USTR) nominee Jamieson Greer’s confirmation hearing, where tariffs and trade remained a key line of questioning:
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Ford CEO: Long-lasting Trump tariffs would wipe out ‘billions’ in auto profits
Ford (F) CEO Jim Farley warned that if tariffs on Canada and Mexico go into effect — and stay that way for some time — auto profits would take a major hit.
Yahoo Finance’s Brian Sozzi reports.
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Gold demand surges amid mounting tariff risks
Central banks and investors are piling into gold as concerns about geopolitics, inflation, and diversification remain in focus.
Yahoo Finance’s Ines Ferré reports:
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Chipotle will absorb tariff costs for a ‘long period of time,’ CFO says
Chipotle (CMG), which sources some of its avocados, tomatoes, limes, and peppers from Mexico, is monitoring US trade talks with Mexico ahead of the March 4 tariff deadline, when a 25% duty is expected to go into effect for Canadian and Mexican imports.
Chipotle CFO Adam Rymer told Yahoo Finance in an interview that the fast-casual chain will be “very patient” with tariffs and won’t raise prices in the near term, Yahoo Finance’s Brooke DiPalma reported.
“As the tariffs come in, we’re able to absorb these costs for a very long period of time,” Rymer said. He noted that if the tariffs are enacted and become “permanent,” Chipotle would pass that increase along to consumers.
Watch the full interview below or read more here.
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Columnist: It’s an unusually bad time for Trump’s tariffs
On Sunday, President Trump warned that Americans could feel “some pain” from his tariff policies but that it would be “worth the price paid.” However, as Yahoo Finance Senior Columnist Rick Newman points out, consumers may be less tolerant of price hikes than they were during Trump’s first administration after enduring the recent bout of inflation.
Newman writes:
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Wall Street firms update their tariff, Fed rate cut outlooks
More Wall Street firms are pointing to tariffs as they revise their outlooks for Fed rate cuts this year. In a note to clients Tuesday, Morgan Stanley (MS) reduced its outlook to one 25 basis point rate cut this year from two previously.
“Imposing tariffs more quickly than we assumed would likely mean disinflation halts at a higher pace of inflation, blocking any near-term path to cuts,” Morgan Stanley analysts wrote in a note on Tuesday, as reported by Reuters.
In a separate note obtained by Yahoo Finance, Goldman Sachs (GS) chief economist Jan Hatzius wrote that the firm now sees US tariffs on Chinese goods rising another 10 percentage points and potentially even higher. From Hatzius:
Goldman still sees two Fed rate cuts this year, as does its peer, Wells Fargo (WFC).
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Why Trump’s tariffs aren’t steering Wall Street off a ‘bullish’ path for stocks
Yahoo Finance’s Josh Schafer reports:
President Donald Trump’s tariffs plans have been front and center for investors over the past week, causing investor angst and, at times, jumpy market action.
But looking past the noisy headlines, the stock market has shown several signs of strength, providing equity strategists with ample reason to believe the path higher for stocks remains intact.
Since last Monday’s DeepSeek-driven AI sell-off in markets, the S&P 500 (^GSPC) is actually up about 0.3%. And despite some sharp downturns, particularly in premarket trading, the benchmark index saw less than a 1% decline on Friday and Monday when tariff speculation was running rampant.
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Trump tariffs shut fast-fashion loophole for Temu and Shein
Fast fashion is set to take a hit with Donald Trump’s tariffs closing a loophole that has given e-commerce retailers Temu and Shein a competitive edge.
As Yahoo Finance’s Jordan Weissman reports:
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Stocks close higher after Trump tariffs take effect, China responds
Stocks closed higher on Tuesday after the US imposed an additional 10% tariff on goods from China and the world’s second-largest economy countered with tit-for-tat measures of its own.
The Dow Jones Industrial Average (^DJI) gained around 0.3%, while the benchmark S&P 500 (^GSPC) rose roughly 0.7%. The tech-heavy Nasdaq Composite (^IXIC) jumped nearly 1.4% to recoup some of Monday’s losses. The US dollar index (DX-Y.NYB) fell 0.9% as worries eased.
President Trump did not speak with Chinese leader Xi Jinping today but is expected to have a call with Xi this week.
In addition to retaliatory tariffs, China opened an antitrust investigation into Alphabet’s (GOOG, GOOGL) Google and added Calvin Klein owner PVH (PVH) and biotech company Illumina (ILMN) to its “unreliable entities list.”
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Canada fumes, fears lost business with Trump trade talks ahead
Bloomberg reports:
A last-minute deal to head off a trade war between the US and Canada has given investors a temporary reprieve, but Canadian leaders are warning about the high-stakes negotiations ahead.
The agreement merely kicked the tariff threat 30 days down the road. Trump said the next month will be used “to see whether or not a final economic deal with Canada can be structured.”
As long as potential tariffs hang over the Canadian economy, economists, businesspeople, and government leaders see the risk that investment will be pulled south.
“Mr. Trump’s strategy around this is deliberate: It’s an intention to destroy Canada’s economy and to drive us into becoming the 51st state,” David Eby, premier of British Columbia, told reporters Monday. He called it “reprehensible, inexplicable, and profoundly disappointing, and it makes me and British Columbians and Canadians very angry, because we see what the plan is here.”
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President Trump says China’s retaliatory tariffs are ‘fine’ and that he’s in no rush to talk with Xi Jinping
Donald Trump offered another update on this week’s trade back-and-forth Tuesday afternoon, saying “that’s fine” when asked about China’s retaliatory tariffs and adding that talks with Chinese President Xi Jinping to resolve the standoff might be a ways off yet.
“We’ll speak to him at the appropriate time. I’m in no rush,” Trump told reporters just one day after saying he expected to talk with Xi in about 24 hours.
Trump also declined to speculate on whether he thought the talks could lead to a lifting of the tariffs when they do happen.
The comments came in the Oval Office Tuesday afternoon after the president signed new executive orders and after the 10% duties on China went into effect. The world’s second-largest economy hit back with a range of moves in response.
China also threatened Tuesday to use probes into Google (GOOG, GOOGL) and Nvidia (NVDA) as leverage in the ongoing face-off.
Other Trump plans for 25% duties on Canada and Mexico are on hold for a month as talks continue. Trump said those talks led to a closing of the border and continued to tout tariffs as a tool across a range of conflicts saying, “We’re doing well with countries that nobody expected.”
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Warby Parker, Skechers, Crocs among apparel brands most exposed to tariffs
Tariffs could soon put pressure on apparel and footwear companies — and their customers.
As Yahoo Finance’s Brooke DiPalma writes, Wrangler jeans maker Kontoor Brands (KTB) and glasses maker Warby Parker (WRBY) are among the companies most exposed to tariffs.
While tariffs on Canada and Mexico have not yet gone into effect, Kontoor sources 30% of its materials from those two countries, while Warby Parker sources 20% of its products from China.
Shoe brands Skechers (SKX) and Crocs (CROX) source 40% and 28% of their products from China, respectively.
Unlike in 2018, companies have less room to raise prices.
“We think it’s a more difficult environment in which to pass along pricing, therefore more likely to be impactful to the margins of the apparel industry,” Stifel analyst Jim Duffy told Yahoo Finance.
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China’s tariff response signals it has ‘more to lose’ from trade war
Minutes after President Trump’s 10% tariffs on Chinese goods went into effect, Chinese leader Xi Jinping countered by announcing retaliatory tariffs on 80 products and an antitrust investigation into Google (GOOG), among other measures.
Bloomberg reports:
Trump and Xi are expected to speak over the phone this week to discuss the tit-for-tat tariffs.
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These Americans will be hit the hardest by Trump’s tariffs
Lower-income Americans are likely to feel the brunt of the unprecedented tariffs President Donald Trump has set in motion.
The cost to lower-income families is magnified because economists say essentials like food, energy, and auto parts are most exposed to the import tariffs Trump has threatened to impose over the next month.
Trump tariffs on Mexico, Canada, and China would cost the typical household about $1,200 per year, Kimberly Clausing, a senior fellow at the Peterson Institute for International Economics, and her colleague Mary Lovely found in a new analysis.
That burden falls disproportionately on those who can least afford it: The tariffs on America’s biggest three trading partners will wipe out 2.7% of the income of the bottom 20% of earners, the Peterson Institute found.
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Tariffs give US steelmakers a green light to lift prices
The Wall Street Journal reports:
Steel prices in the US were already climbing before President Trump announced his latest round of tariffs on Canada and Mexico. If the 25% tariffs go into effect, US manufacturers are preparing for even higher costs.
While the move aims to strengthen the US steel industry, it could impact several sectors, driving up the cost of everything from car prices to soda cans.
“You’re going to see those bad actors that are distorting how they price goods penalized,” said Leon Topalian, CEO of US steel industry leader Nucor (NUE).
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Trump’s 2.0 trade war is already ‘fundamentally different’ from 1.0
Yahoo Finance’s Ben Werschkul reports:
The hectic kick off to Donald Trump’s tariffs in recent days is making one thing abundantly clear: This is very different from Trump 1.0.
On an array of issues — from the speed of the duties and the wider array of consumer staples caught in the middle to Trump’s plan to use tariffs for “getting everything else you want” — the president is offering a new and unpredictable approach.
“It is fundamentally different,” former US trade representative general counsel Greta Peisch said in an interview, noting that Trump is now “breaking new ground in what is a trade authority, what are they used for, and how expensive the transactions will be.”
Trump is approaching the tariff issue this time around at a different speed and promising duties at higher levels. The current “blanket tariffs first” approach in evidence this week was absent from 2017-2020.
There is another key difference between Trump’s 2.0 and 1.0 trade wars: The rest of the world has had time to prepare.
