U.S. stock markets sold off sharply on Monday after President Donald Trump dashed hopes that he would hold off again on imposing tariffs on Canada and Mexico.

The Dow Jones Industrial Average tumbled 650 points, or 1.5%. The S&P 500 sank 1.8%, and the Nasdaq lost 2.6%. The 10-year Treasury yield slipped 6.6 basis points to 4.16% as investors crowded into safe-haven US bonds.

Just after midnight on Tuesday, the U.S. will impose a 25% tariff on Mexico and Canada, with Canadian energy imports getting a 10% tariff.

Last month, Trump put them on hold for 30 days after receiving last-minute assurances from both countries to boost border security. Markets were looking for signs that another delay might come, but Trump said Monday there's "no room left for Mexico or for Canada."

Both countries, which are America's top trading partners, have already warned they will impose retaliatory duties.

Trump also said so-called reciprocal tariffs will go into effect April 2. Last month, he signed a memorandum moving the U.S. a step closer to imposing tariffs that match what other countries around the world levy on U.S. goods.

Meanwhile, he has also slapped a 10% duty on China that will soon double and threatened tariffs on the European Union, steel, aluminum, autos, chips, and pharmaceuticals.

Monday's affirmation of Trump's aggressive tariff agenda comes as a number of economic indicators have deteriorated in recent weeks , due in part to concerns about higher duties as well as the higher costs that will result from them.

Earlier Monday, the Atlanta Fed's economic tracker continued to worsen and now indicates that first-quarter GDP is on pace to shrink by 2.8%, after showing 1.5% contraction on Friday and growth of 2.3% on Feb. 19.

While economists don't think a recession is coming, this Friday's monthly jobs report from the Labor Department will come under extra scrutiny for any signs employment is taking a hit, especially as Elon Musk's Department of Government Efficiency slashes the federal workforce.