Members of U.S. President Donald Trump’s administration are defending his growing trade war with Canada and the impact it’s having on markets and retirement savings, claiming any short-term pain will eventually lead to long-term “prosperity.”
The U.S. stock market was sinking further Tuesday after Trump said he would double tariffs on Canadian steel and aluminum, continuing a downward trend that has pulled Wall Street more than nine per cent below its record set just a month ago.
Trump said it was in direct response to Ontario’s move to put an export tax on electricity it sells to U.S. states, which was retaliation for the sweeping 25 per cent U.S. tariffs imposed earlier this month.
Asked if she can promise Americans who have seen their pensions and retirement savings plans affected by the market turmoil that their pain will be worth it, Agriculture Secretary Brook Rollins told reporters outside the White House that she believes in Trump’s “vision.”
“I (have seen) first hand … his commitment, his passion for the everyday American, but especially those Americans with the least among us,” she said.
“I think it’s really important to realize that Americans knew exactly who they were voting for on Nov. 5 of last year, that he won all the swing states, he won the popular vote. Americans believe in his vision. So as we move forward, and as we’re effectuating that vision, he is bold and he is fearless and he is unequivocal in his beliefs, and what he believes will bring more prosperity to America and truly make America great again, and what an honour to be part of that team.”
Rollins acknowledged Americans, particularly farmers and ranchers now facing higher import costs for agricultural products from Canada, are “concerned” and the uncertainty they’re feeling is “real,” but again defended Trump’s trade policies as an important part of his economic “toolkit.”
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“He’s been very clear, it’s going to be a little bit bumpy for maybe a few weeks or a few months, but at the end his vision and what he’s effectuating is that our American farmers and ranchers, but truly all Americans, will be moving into an era of greater prosperity,” she said.
The S&P 500 was down 0.9 per cent in midday trading after Trump’s announcement on social media Tuesday that he will raise tariffs on steel and aluminum from Canada to 50 per cent, effective Wednesday.
The Dow Jones Industrial Average was down 554 points, or 1.3 per cent, as of 11 a.m. eastern time, and the Nasdaq composite was 0.5 per cent lower.
The drops extend a sell-off on Wall Street that has taken investors on a scary ride, fueled by worries about how much pain Trump will allow the economy to endure through tariffs and other policies intended to remake the country and world.
The S&P 500 has swung by at least one per cent, up or down, seven times in the last eight days.
Canadian markets have also been impacted. The S&P/TSX composite index was down 58.39 points at 24,322.32 in morning trading on Tuesday after dropping more than 500 points during trading the day before.
“If the market goes down, it’s going to affect people’s pensions,” Ontario Premier Doug Ford said in an interview with MSNBC after Trump’s announcement.
“Stop the chaos. It’s hurting American families, it’s hurting Canadian families. … The markets are speaking, people will be speaking, and businesses will be speaking as well.”
Trump is under pressure to show he has a legitimate plan to grow the economy instead of perhaps pushing it into a recession. He’s set to deliver a Tuesday afternoon address to the Business Roundtable, a trade association of CEOs that he wooed during the 2024 presidential campaign with the promise of lower corporate tax rates for domestic manufacturers.
Economists almost universally agree that Trump’s tariffs on Canada, Mexico, China, steel and aluminum — with plans for more to possibly come on Europe, Brazil, South Korea, pharmaceutical drugs, copper, lumber and computer chips — would amount to a massive tax hike.
The White House on Monday said the administration has secured “trillions” of dollars in new private sector investments that will ultimately create jobs and boost the economy.
“President Trump delivered historic job, wage, and investment growth in his first term, and is set to do so again in his second term,” White House spokesperson Kush Desai said in a statement to The Associated Press.
Trump has tried to dismiss the market swings and declined to say in an interview that aired Sunday on Fox News whether a recession could be avoided, but acknowledged there will be a “period of transition.”
Asked aboard Air Force One on Sunday what he had to say about Americans worried about their savings, Trump instead boasted of his belief in tariffs.
“I think the tariffs are going to be the greatest thing we’ve done as a country,” he told reporters. “It’s going to make our country rich again.”
—With files from the Associated Press
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