The Mexican peso, Canadian dollar, and Chinese yuan are dropping after Donald Trump renewed tariff threats against the three countries, clarifying (and contradicting) comments made ahead of yesterday’s cabinet meeting.

In a post on his social media platform, Truth Social, the president said “Drugs are still pouring into our Country from Mexico and Canada at very high and unacceptable levels. A large percentage of these Drugs, much of them in the form of Fentanyl, are made in, and supplied by, China. More than 100,000 people died last year due to the distribution of these dangerous and highly addictive POISONS. Millions of people have died over the last two decades. The families of the victims are devastated and, in many instances, virtually destroyed. We cannot allow this scourge to continue to harm the USA, and therefore, until it stops, or is seriously limited, the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled. China will likewise be charged an additional 10% Tariff on that date. The April Second Reciprocal Tariff date will remain in full force and effect”.

The selloff in all three currencies looks relatively limited thus far, suggesting that traders expect another 11th-hour reprieve to come next week. We’re not confident in that assumption—the political calculus would suggest that the president will be forced to follow through on his threats at some point—but it is also clear that tariffs will inflict significant damage on the American economy itself, so would suspect that implementation won’t last for a prolonged period of time.