A major sell-off of stocks on Wall Street continued Tuesday on the heels of an intensifying trade war between the U.S. and Canada.
The Dow Jones Industrial Average was down about 478 points (1.14%) at market close, while the S&P 500 was down 0.76%. Meanwhile, the Nasdaq Composite index — often used as an indicator of growth in the technology sector — saw moderate periods of both growth and decline before closing down about 0.18%
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This comes a day after the three major U.S. indexes continued to skid amid rising economic fears and talk of a potential recession on the horizon. A recession is broadly defined as two consecutive quarters of decline in U.S. Gross Domestic Product, or the total value of goods and services produced.
There are also growing concerns over the threats of additional tariffs on major U.S. trade partners as President Donald Trump warns of an economic "transition period" ahead.
Earlier Tuesday, President Trump threatened that he will double his planned tariffs on Canadian steel and aluminum from 25% to 50%. He said on social media that the increase of the tariffs set to take effect on Wednesday is a response to the price increases that the provincial government of Ontario put on electricity sold to the United States.
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However, President Trump then backtracked on those threats, telling reporters later Tuesday that he spoke with a Canadian official, who told him the surcharge on electricity sold to the U.S. won't be going into effect.
"President Trump has once again used the leverage of the American economy, which is the best and biggest in the world, to deliver a win for the American people," White House spokesperson Kush Desai said. "Pursuant to his previous executive orders, a 25 percent tariff on steel and aluminum with no exceptions or exemptions will go into effect for Canada and all of our other trading partners at midnight, March 12th.”
President Trump has given a variety of explanations for the trade war with Canada, insisting the country needs to do more to stop the flow of fentanyl into the U.S. while also saying the tariffs are in response to Canada placing high taxes on dairy imports that negatively impact U.S. farmers.
