In a shocking move, former President Donald Trump announced an additional 25% tariff on steel and aluminum imports from Canada, bringing the total tariff rate to a staggering 50%. This announcement sent ripples through the stock market, causing a significant sell-off where automakers and industrial firms took the hardest hits.

On Tuesday, Trump took to Truth Social to reveal his strategy, claiming he instructed his commerce secretary to enforce the hefty tariffs. The tariffs are set to come into effect on March 12. Additionally, Trump vowed to declare a national emergency regarding electricity resources, aimed at countering potential Canadian threats to cut off power in certain U.S. regions as retaliation against the tariffs.

"This will allow the U.S. to quickly do what has to be done to alleviate this abusive threat from Canada," Trump declared. Investors reacted swiftly, with major stock indices plummeting; the Dow Jones Industrial Average dropped as much as 633 points at one point during the day.

Automakers, heavily reliant on affordable steel and aluminum, experienced severe declines—General Motors and Ford shares fell by almost 4%. The broader industrial sector decreased by approximately 2%, sharply contrasting with the S&P 500's overall drop of 1%. Conversely, companies like US Steel and Nucor capitalized on the news, with their stocks rising up to 3%.

This turmoil follows a troubling trend; the previous week, the Nasdaq Composite recorded its worst single-day performance since 2022, falling by 4%. Since mid-February, the S&P 500 has lost about 9% while the Nasdaq has dipped around 13%.

Trudeau's administration has already indicated its intention to retaliate against U.S. tariffs. Following Trump's earlier tariff announcements, Canadian Prime Minister Justin Trudeau declared a 25% retaliatory tariff on $155 billion worth of American goods until the U.S. agrees to withdraw its tariffs.

Looking ahead, Trump has threatened to "substantially increase" tariffs on cars if Canada does not drop its own tariffs on U.S. goods by April 2. This could lead to severe repercussions for Canadian automobile manufacturing, as Trump suggested, claiming, “Those cars can easily be made in the USA!”

Trudeau has warned that the ramifications of Trump’s trade war extend beyond borders, stating, "Americans will pay more for groceries, gas, and cars, and potentially lose thousands of jobs. Tariffs will disrupt an incredibly successful trading relationship."

As tensions rise, the economic fallout may challenge not just the markets, but also the fabric of U.S.-Canada relations. American consumers may soon feel the pinch as Trump's trade war continues to unfold. Stay tuned as this trade saga develops—could this be a turning point in international trade relations?