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 sank 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 10 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. The White House later said Trump was keeping the original 25 per cent rate for steel and aluminum tariffs after Ontario Premier Doug Ford lifted the electricity surcharge, but not in time for markets to bounce back.
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.”
“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 fell 0.8 per cent over the course of Tuesday, but only after careening between a modest gain and a tumble of 1.5 per cent. At its bottom for the day, the index was more than 10 per cent below its all-time high and on track for what Wall Street calls a “correction.”
Other indexes likewise swung sharply through the day. The Dow Jones Industrial Average lost 478 points, or 1.1 per cent, and the Nasdaq composite ended up slipping 0.2 per cent.
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 closed down 132.51 points 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 initial 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. Yet he defended his tariffs in 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.
“The tariffs are having a tremendously positive impact,” Trump said, pointing to increasing commitments from auto manufacturers to build plants in the U.S. and brushing off the stock market reaction.
He also said tariffs may rise above 25 per cent, but did not specify which ones, claiming that would only further fuel investments.
“The higher it goes the more likely it is they’re going to build” in the U.S., he said. “That’s a bigger win than the tariffs themselves. But the tariffs are going to be throwing off a lot of money to this country.”
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.
White House press secretary Karoline Leavitt refuted that assessment in a briefing with reporters Tuesday, claiming falsely that “tariffs are a tax cut for the American people.” That prompted pushback from an Associated Press reporter who noted tariffs are ultimately paid by U.S. importers, not foreign countries.
“Ultimately, when we have fair and balanced trade which the American people have not seen in decades, revenues will stay here, wages will go up and our country will go wealthy again,” Leavitt said, calling the reporter’s questioning of Trump’s decisions “insulting.”
Leavitt also called the turmoil in the stock markets “a snapshot of a moment in time” and that there was “great indication to be optimistic about where the economy stands.”
“People on Wall Street and Main Street should bet on this president. He’s doing what’s right for this country,” she said.
U.S. Commerce Secretary Howard Lutnick, who is overseeing Trump’s tariff policy, has repeatedly dismissed concerns about fluctuations in the stock market and urged Americans to look at the long-term strategy Trump is implementing.
“The president wants American growth and American prosperity,” he told CNBC last Thursday.
“The fact that the stock market goes down a half a percent or a percent, or goes up a half or a percent or a percent, that is not the driving force of our outcomes.”
Lutnick then told NBC’s Meet the Press on Sunday that Americans may face higher prices, but will ultimately see benefits for domestic goods and industries.
“Will there be distortions? Of course,” Lutnick said. “Foreign goods may get a little more expensive. But American goods are going to get cheaper, and you’re going to be helping Americans by buying American.”
U.S. House Speaker Mike Johnson, a Republican ally of Trump in Congress, told reporters Monday anyone concerned about the markets should “look at the first term of the Trump administration prior to COVID” as proof of “what he can do on the economy.” Johnson acknowledged, however, that “there’s going to be a shakeup right now.”
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.”
He did not directly answer repeated questions earlier Tuesday afternoon from reporters outside the White House if he had a message for Americans concerned about the markets and their investments.
“On the financial end and the economic end, what we’re doing is the most exciting (thing),” he said.
“Our country will be greater than ever before, and it won’t take too long.”
—With files from the Associated Press and the Canadian Press
© 2025 Global News, a division of Corus Entertainment Inc.
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