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Canada’s main stock index fell moderately as stocks south of the border dropped sharply amid talk of tariffs on steel and aluminum by U.S. President Donald Trump.

The president told industry executives Thursday he would impose a tariff of 25% on imported steel and 10% on aluminum, sparking fears the move will lead to other countries putting up trade barriers that will hurt the global economy. The head of the European Commission said the region would respond in kind.

“Everyone’s afraid of these protection-type of events, like this announcement, that can only lead to a trade war with other countries,” said Allan Small, a senior investment adviser at HollisWealth.

“You start putting tariffs on stuff you’re importing into your country, the prices are going up and obviously you have higher inflation, you have higher interest rates. And so I think that’s what the market has been fearing for a while now.”

In New York, the Dow Jones industrial average was down 420.22 points to 24,608.98. The S&P 500 index was down 36.16 points to 2,677.67 and the Nasdaq composite index was down 92.45 points to 7,180.56.

U.S. stocks had been higher earlier in the day after Federal Reserve chairman Jerome Powell testified before Congress that he does not see inflation in workers’ wages “at a point of acceleration,” easing trading anxieties following his comments earlier in the week many interpreted as a signal the Fed may raise rates more quickly than expected to beat down inflation.

In Canada, the S&P/TSX composite index was down 48.73 points to 15,393.95 in a largely broad-based decline. Gains in the health-care sector which include the volatile marijuana stocks helped lessen downward pressure on the TSX as did strong earnings from Toronto-Dominion Bank.

Shares of TD were up 92¢, or 1.24%, to $74.92 after its first-quarter profits beat market expectations, despite a hefty charge due to U.S. tax reform, to close out another strong earnings season for Canada’s biggest lenders.

In currency markets, the Canadian dollar closed at an average trading value of US77.81¢, down 0.26 of a U.S. cent. The loonie is almost down US2¢ against the U.S. dollar since Feb. 16.

On the commodities front, the April crude contract was down US65¢ to US$60.99 per barrel and the April natural gas contract was up US3¢ at US$2.70 per mmBTU.

The April gold contract was down US$12.70 to US$1,305.20 an ounce and the May copper contract was down US1¢ to US$3.12 a pound.

With a file from The Associated Press