U.S. stock markets experienced a notable decline on Friday, with the S&P 500 closing down 1.2%, the Dow Jones Industrial Average falling by 1.6%, and the Nasdaq Composite dipping 0.4%. This downward trend marks a significant turn of events, as the S&P 500 has now erased its gains made following the recent election, raising alarms among investors concerning trade relations and tariffs.

The sell-off can largely be attributed to growing apprehensions surrounding U.S. tariff policies, particularly in the wake of retaliatory measures taken by China. In response to tariffs imposed by the United States, China announced on Friday that it would implement tariffs of up to 15% on a range of U.S. agricultural imports. This decision is expected to have wide-reaching implications for American farmers and the agricultural sector, as China represents one of the largest export markets for U.S. agricultural products.

Adding to the tension on the market, Canada stated its intention to impose tariffs on over $100 billion worth of U.S. goods. This includes a variety of products ranging from agricultural goods to consumer items, indicating that Canadian officials are also preparing to respond to the ongoing trade disputes. Meanwhile, Mexico is anticipated to announce its own tariff measures on Sunday, further escalating concerns among investors who are closely monitoring trade developments.