U.S. stocks dropped Tuesday on heightened fears of a global trade war as Trump administration tariffs against Mexico and Canada went into effect, but major averages sharply pared losses in afternoon trade,

Stocks fall sharply Monday, extending declines in late afternoon trade as President Donald Trump affirmed 25% tariffs on imports from Canada and Mexico will take effect. Earlier, stocks felt pressure after a weaker-than-expected February reading for a key manufacturing index.

In the hours after implementation of the new levies, leaders from Mexico, Canada, and China all vowed to take retaliatory action. U.S. stocks seemed to respond, opening lower for