US stock markets had an inclination to find a bottom today but it’s all gone off the rails after Trump announced fresh tariffs on Canada.

The decline isn’t so much about another 25% on Canadian steel and aluminum as it’s about the inclinations of a President that has a serious fetish around tariffs with seemingly no one around him able to curb his worst impulses. In addition, he continues to pursue an annexation of Canada.

The S&P 500 is down 1.2% today and at a session low. It’s also down 9.8% from the record high on February 18. The Nasdaq Composite is down nearly 15%.

At some point the declines will become unbearable and Trump, courts or Congress will put a stop to the trade war. We haven’t hit that pain point yet but given that Delta is warning about a flagging consumer, we might be headed in that direction. Tomorrow will be an important day with US CPI on the agenda but I tend to think that we will see some resilience in the market until April 2 when Trump has planned to launch wide tariffs on the world.

In terms of targets, some are eyeing the August low in the S&P 500 at 5119. That would be a 16% decline.while a drop to the April 2024 low would be 19%.

For its part, incoming Canadian Prime Minister Mark Carney has just sent out a message:

President Trump’s latest tariffs are an attack on Canadian workers, families, and businesses. My government will ensure our response has maximum impact in the US and minimal impact here in Canada, while supporting the workers impacted.

My government will keep our tariffs on until the Americans show us respect and make credible, reliable commitments to free and fair trade.

On we go.

This article was written by Adam Button at www.forexlive.com.