Canada’s main stock index fell to its lowest level in nearly two months, as investors assessed President Donald Trump’s imposition of new tariffs on the United States’ three biggest trading partners.
At 10:00 a.m. ET (1500 GMT), the Toronto Stock Exchange’s S&P/TSX composite index dropped 1.8% to its lowest since January 14. That put the index on track for its worst day in more than two months and its second straight session of losses.
All the 11 sectors declined, with energy leading the losses with a 2.2% fall. Financial and technology lost 2.4% each.
Trump imposed a 25% tariff on imports from Mexico and Canada, effective Tuesday, along with a doubling of duties on Chinese goods to 20%.
“If the U.S. tariffs remain in place, Canada will undoubtedly fall into recession. The limited decline in the loonie so far suggests markets are still pricing in a quick u-turn from the Trump administration,” said Stephen Brown, deputy chief North America economist at Capital Economics.
TSX inches up as investors evaluate tariff impact and economic data
China announced additional tariffs ranging from 10% to 15% on select U.S. imports, effective March 10. Canada and Mexico, accustomed to a nearly tariff-free trading relationship with U.S., were poised to swiftly retaliate against their long-standing ally.
Canadian Prime Minister Justin Trudeau announced that Ottawa would impose immediate 25% tariffs on C$30 billion ($20.7 billion) worth of U.S. imports. Furthermore, should Trump’s tariffs persist for 21 days, an additional C$125 billion ($86.2 billion) in tariffs would be enacted.
The Canadian dollar was steady. Oil prices extended losses after reports of OPEC+ planning to proceed with output increase in April.
Company-wise, Magna International fell 4.6% after BofA Global Research downgraded its rating to “neutral”.
Teck lost 2.5%, after the Canadian miner’s CEO said it was looking to sell zinc to Asia instead of the U.S. to contend with new tariffs.
American Dollar Exchange Rate