Who knows how it’ll ultimately shake out — any of it.

But as Tuesday’s session wore on, US equities were struggling to hold a bid amid a fresh escalation in the worsening spat between Donald Trump and Canada, where America’s famously convivial neighbors are grappling with the surreal specter of annexation.

Shortly after Trump doubled metals tariffs in response to Ontario’s electricity price hike, provincial chieftain Doug Ford showed up on CNBC to remind Americans just how absurd this really is.

“All he’s doing is hurting markets, as you can see,” Ford said, speaking against a “Canada Is Not For Sale” backdrop. “Markets are tumbling, consumer confidence is down, inflation is going up and if it continues, plants will close down, assembly lines will shut down, and over what?”

Good question. Trump’s answer last week would’ve been “over fentanyl” and “over unfair trade.” To the extent the latter accusation makes sense, the former doesn’t: More illegal fentanyl flows into Canada from America than the other way around. On Tuesday, Trump introduced a new rationale for the trade war: Canada’s “relying on the United States for military protection” which, to the extent that entails a “subsidy” derived from unbalanced trade, “cannot continue.”

Trump went on to call the US-Canada border “artificial” and made his most brazen remarks yet about absorbing the country. A couple of hours later, Trump accused Ford of weaponizing energy. “Can you imagine Canada stooping so low as to use electricity that so affects the life of innocent people, as a bargaining chip and threat?” he wondered, before issuing a Netanyahu-like warning: “They will pay a financial price for this so big that it will be read about in History Books for many years to come!”

This is the sort of thing that prompts (indeed forces) market participants to question the idea that “good Trump” (i.e., tax cuts, deregulation and a determination to support stock prices) will generally get the better of “bad Trump” (i.e., protectionism, populism and, now, neo-imperialism) when push comes to shove, which is to say when Wall Street’s selling off and the economy’s rolling over.

The figures below, from Nomura’s vol team, give you a sense of just how abrupt the US macro zeitgeist shifted. As of a month ago, SOFR-implied “no landing” odds (i.e., no 2025 Fed cuts, with an outside chance of a rate hike given an overheating US economy) were around 40%. Those odds coming into Tuesday were just 2%.

Now, “hard landing” is priced at virtually the same odds as “no landing” was just a few weeks ago. Remember: Virtually no one thought a US recession was on the cards for 2025 as of Inauguration Day.

If last week was remarkable for the extent to which equities didn’t respond to Trump’s efforts to calm the market by delaying some tariffs on Canada and Mexico, Tuesday was remarkable for Trump’s willingness to escalate further just a day on from the Nasdaq 100’s worst session in years, and just as CEOs descended on The White House for a Business Roundtable event.

It was almost as if Trump was telling corporate America and Wall Street, “You wanna see crazy?! I’ll show you crazy!”

In the same interview with CNBC, Ford said cutting off electricity to the US was “the last thing I want to do,” but added that one way or another, “This chaos has to stop.”