Dow futures plummet after Trump announces new Mexico tariffs
Dow Jones Industrial Average futures dropped more than 200 points on Thursday after President Trump announced plans to impose tariffs on Mexico until the flow of immigrants to the southern U.S. border is cut off.
The index saw losses of almost 255 points by Friday morning, hours after Trump tweeted to announce a 5 percent tariff on all imports from Mexico that would “gradually increase” until the flow of migrants stopped.
Nasdaq futures took an even greater hit after the news, shedding 94 points (1.3 percent) in after-hours trading. The S&P 500 also saw a drop of more than 1 percent, falling 29.50 points after hours.{mosads}
Stock index futures weren’t the only financial indicators set for a drop Friday following the news: Mexico’s currency, the peso, dropped the largest amount of value the currency has seen lost in a single day since October, plunging about 2 percent of its total value.
Financial experts are already warning investors of the effects the measure against Mexico will have on the U.S. economy, with Goldman Sachs analyst Alec Phillips writing in a note to investors Friday that the action will likely be “highly disruptive” to the economy, according to CNN.
Those numbers are set to finish off a sixth week in a row of losses for the Dow, which according to CNN is in its worst streak of losses since October of 2011.
Trump announced Thursday that the duties would go into effect on June 10 and that they would get steeper until the “Illegal Immigration problem is remedied,” suggesting a high goal for Mexico’s officials to meet before the tariffs would lift.
The tariffs are expected to raise to 25 percent by Oct. 1 if Mexico does not substantially reduce the number of immigrants illegally crossing the U.S.-Mexico border.{mosads}
White House officials defended Trump’s decision to reporters, declaring it necessary to force Mexico to assist the Trump administration in dealing with conditions at the border, which the administration has called a crisis.
“Americans are paying for this right now. Illegal immigration comes at a cost. American taxpayers are paying for what’s going on at the border. This is already impacting the economy negatively,” acting chief of staff Mick Mulvaney said Thursday.
The market has dropped by hundreds of points at a time following similar announcements of tariff action by the Trump administration since the beginning of this year, though losses are often regained in the following days.
Earlier this month, the index dropped by 400 points following an announcement of tariffs on China that would be raised due to the inability of the U.S. and China to reach a trade agreement.
Updated May 31 at 8:03 a.m.