Canadian stocks are poised for a downturn as markets open this Monday, spurred by concerns of a protracted trade conflict following the Trump Administration’s implementation of 25% tariffs on Canadian imports. President Trump enacted these tariffs through an executive order signed on Saturday, although energy imports will incur a reduced tariff of 10%. Furthermore, President Trump has indicated that the European Union and the United Kingdom may face similar trade measures.
In response, both Canada and Mexico have announced retaliatory tariffs on U.S. products, while China has pledged to take counteractions. The European Union has also issued a warning of decisive retaliation if targeted.
In light of President Donald Trump’s executive order instituting 25% tariffs on nearly all imports from Canada, Canadian Prime Minister Justin Trudeau has stated he is compelled to introduce countermeasures.
Regarding economic reports, the S&P Global's release on Canada's Manufacturing PMI is anticipated at 8:30 AM ET. The PMI for December showed an increase to 52.2 compared to 52.0 in November, marking the strongest manufacturing activity since February 2023 and representing the fourth straight month of growth.
Following a record-breaking close the prior day, the Canadian market opened slightly higher on Friday, only to lose momentum as selling pressure mounted across multiple sectors. This downturn followed the confirmation that the Trump Administration will commence imposing the 25% tariffs on February 1.
In remarks today, President Trump stated that neither Canada, Mexico, nor China can take any actions to prevent these tariffs, and further noted that tariffs on oil and gas might be implemented by February 18.
The S&P/TSX Composite Index concluded with a decline of 275.15 points, or 1.07%, at 25,533.10, yet still recorded a weekly gain of 0.25%.
Asian markets took a significant hit on Monday after President Trump executed his tariff threats against Canada, Mexico, and China, and hinted at similar measures against the UK and EU, thus escalating trade tensions considerably.
Similarly, European markets saw sharp declines on Monday in response to the U.S.’s tariff actions, amid broader concerns about the potential harm of a trade war on global economic growth and corporate earnings.
In commodities trading, West Texas Intermediate Crude futures have risen by $1.88, or approximately 2.59%, reaching $74.41 per barrel. In contrast, Gold futures have decreased by $210, or 0.07%, to $2,832.90 per ounce, while Silver futures have fallen by $0.095, or 0.29%, to $32.170 per ounce.
