Several Republican senators are poised to join Democrats in opposing President Donald Trump‘s proposed 25% tariffs on Canada, as market experts warn of potential economic fallout ahead of Wednesday’s anticipated trade announcement.
What Happened: Sen. Susan Collins (R-Maine) confirmed on Monday she plans to back Sen. Tim Kaine‘s (D-Va.) resolution to terminate the national emergency declaration Trump used to justify the tariffs on America’s largest trading partner.
“Imposing tariffs on Canada, which is our closest neighbor, [a] friendly ally, is a huge mistake and will cause disruption in the economies of both countries,” Collins said, according to Politico, while wearing Canadian and U.S. flag pins. She cited potential job losses in key Maine industries, including lobstering, wood pulp, and agricultural production.
Collins is expected to join GOP Sen. Rand Paul (R-Ky.), a co-sponsor of Kaine’s resolution, and Sen. Thom Tillis (R-N.C.), who expressed concerns about tariffs on North American neighbors. “We need to fight battles with our foes first and then try to figure out any inequities with our friends second,” Tillis said.
If all 47 Democratic caucus members support the resolution and at least four Republicans join, it would mark the most significant Republican rebuke of Trump’s second term.
Why It Matters: Meanwhile, the tariff uncertainty has contributed to market volatility. The S&P 500, tracked by SPDR S&P 500 ETF Trust (NYSE:SPY), recently entered correction territory and recorded its worst quarterly performance against global markets since 1988, according to Bloomberg data.
Fundstrat‘s Tom Lee believes markets are “deeply oversold” with investors pricing in “worst case” scenarios. “Post-Wednesday, markets are going to have some visibility. That allows us to take some of the selling pressure off,” Lee said on Monday.
A Benzinga poll found 48% of respondents believe markets will crash following Trump’s reciprocal tariff announcement, while 29% expect little impact and 23% anticipate a market rise.
As technology stocks like The Trade Desk Inc. (NASDAQ:TTD) and Tesla Inc. (NASDAQ:TSLA) drove much of the quarterly decline, energy emerged as the strongest sector, with the Energy Select Sector SPDR Fund (NYSE:XLE) outperforming amid year-to-date gains of 8.5%.
Read Next:
Image via Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
