US Stocks Extend Selloff as Trump Raises Tariffs on Canada Metals

This is a ‘headline driven market,’ says one market analyst.

Traders work on the floor of the New York Stock Exchange in New York City, on March 7, 2025. Spencer Platt/Getty Images

The U.S. stock market extended its selloff on March 11 after President Donald Trump hit Canada with more tariffs.

After trading in positive territory at the opening bell, the blue-chip Dow Jones Industrial Average plummeted more than 500 points, or 1.2 percent. The Dow Jones is down close to 3 percent this year.

The tech-heavy Nasdaq Composite Index tumbled more than 100 points, or about 0.6 percent. The index slipped into correction territory (i.e., loss of 10–20 percent) to start the trading week, falling 10 percent from its high.

The broader S&P 500 Index shed 0.7 percent, adding to its year-to-date decline of more than 5 percent.

Treasury securities held steady amid the latest declines, with the benchmark 10-year yield little changed, at 4.22 percent.

U.S. stocks appeared to stabilize following the March 10 market rout, which wiped out $1.5 trillion in value. However, conditions on Wall Street quickly deteriorated when Trump announced he was doubling tariffs on Canadian steel and aluminum in response to the province of Ontario’s duties on electricity.

Trump confirmed on Truth Social that he ordered his administration to increase tariffs on Canadian steel and aluminum by an additional 25 percent, effectively raising total levies to 50 percent.

The new measure will go into effect on March 12.

According to the president, the decision was made after Ontario Premier Doug Ford implemented a 25 percent tax on electricity exports to the United States. Ontario, Canada’s most populous province, ships electricity to Michigan, Minnesota, and New York.

Trump will soon declare a national emergency on electricity “within the threatened area.”

“This will allow the U.S. to quickly do what has to be done to alleviate this abusive threat from Canada,” Trump said on the social media platform.

Trump also urged Canada to drop its “egregious, long-time tariffs,” including import duties on U.S. dairy products and automobiles manufactured north of the border.

The president reiterated his calls for Canada to become the 51st state. “This would make all Tariffs, and everything else, totally disappear,” he said.

“Canadians’ taxes will be very substantially reduced, they will be more secure, militarily and otherwise, than ever before, there would no longer be a Northern Border problem, and the greatest and most powerful nation in the world will be bigger, better and stronger than ever—And Canada will be a big part of that.”

During an interview with MSNBC shortly after the announcement, Ford said his government would not back down.

“I apologize to the American people that President Trump decided to have an unprovoked attack on our country, on families, on jobs, and it’s unacceptable,” Ford said.

Administration officials have said the president’s use of tariffs is a mechanism to recalibrate what they say is an unfair global trade market that caused a significant trade deficit for the United States and to facilitate a transition of companies and manufacturing capacities returning to the country. They also said it is a revenue generator for the federal government.

‘Headline-Driven Market’

Financial markets have been reeling from the new administration’s tariff plans, which have fueled concerns about the U.S. economy slipping into a recession.

Market conditions are changing rapidly, and the conversation keeps evolving, says Gina Bolvin, the president of Bolvin Wealth Management Group. “The market is bipolar,” Bolvin said in a note emailed to The Epoch Times.

Months ago, Bolvin noted, market watchers discussed the need for the Federal Reserve to raise interest rates to cool the hot economy. Today, investors are worried that the economy will contract, forcing the U.S. central bank to impose emergency rate cuts.

“This is a headline-driven market—one that could change in an hour,” Bolvin stated. “Sit tight. Buckle up. We finally have the correction we were waiting for, and long-term investors will be rewarded again.”

Larry Tentarelli, the chief technical strategist for Blue Chip Daily Trend Report, echoed this sentiment, calling it a “highly volatile market.”

Tentarelli said while the stock market is drowning in a sea of red ink, the benchmark averages “could stage a sharp reversal” on “any positive news catalysts.”

A White House official downplayed the market turmoil, calling it a “divergence” between stocks and business activity.

“Want to emphasize that we’re seeing a strong divergence between animal spirits of the stock market and what we’re actually seeing unfold from businesses and business leaders, and the latter is obviously more meaningful than the former on what’s in store for the economy in the medium to long term,” the White House official said in a statement.

Trump declined to rule out the possibility of a recession in an interview with Fox News’s “Sunday Morning Futures.”

“There is a period of transition because what we’re doing is very big,” Trump said. “We’re bringing wealth back to America. That’s a big thing. And there are always periods of ... it takes a little time.”

Commerce Secretary Howard Lutnick dismissed downturn fears, telling NBC’s “Meet the Press” that “there’s going to be no recession in America.”

“I would never bet on recession, no chance,” he said.

Meanwhile, Wall Street strategists lowering their recommendations for U.S. stocks are starting to mount.

Citi analysts, for example, trimmed their outlook for U.S. stocks from “overweight” to “neutral.”

“In the big picture, U.S. equity outperformance may well return when the AI narrative takes over again, but in the coming months, we expect U.S. growth momentum to undershoot the (rest of the world),” the bank said in a note.

Another metric for market sentiment—the CNN Business Fear & Greed Index—plunged to “Extreme Fear” for the first time since the onset of the pandemic.

Digesting Data

Investors also digested two key pieces of data.

The National Federation of Independent Business’s (NFIB) Small Business Optimism Index fell to its lowest level since October, and came in below market expectations. According to Bill Dunkelberg, the NFIB’s chief economist, the drop was fueled by inflation and labor quality.

“Uncertainty is high and rising on Main Street and for many reasons,” he said in a statement.

According to the Bureau of Labor Statistics, job openings unexpectedly surged by 232,000 in January, to 7.74 million, up from a downwardly revised 7.51 million in December.

This week’s main event will be the February Consumer Price Index (CPI) report. The annual inflation rate is projected to be 2.9 percent, down from 3.0 percent in the previous month. Core inflation, which omits the volatile energy and food components, is anticipated to slip from 3.3 percent to 3.2 percent.

“There has been little in the way of progress on inflation—as measured by the Consumer Price Index—since the middle of last year and now there are worries that tariffs could add another layer of price increases,” said Greg McBride, the chief financial analyst at Bankrate, in a statement to The Epoch Times.

“The CPI will remain a closely watched economic release for months to come.”

Reuters contributed to this report.

Correction: A previous version of this article misidentified the person who plans to declare a national emergency on electricity. The Epoch Times regrets the error.