Investors' concerns about Trump's tariff promises cause the TSX to fall
Canada's main index of stocks fell on Tuesday as energy shares were hurt. Investor sentiment was weighed down by President-elect Donald Trump’s promise to impose large tariffs on the top U.S. Trading Partners, including Canada.
The S&P/TSX Composite Index was down 117.7 point, or 0.46% at 25,292.65.
Trump said on Monday that he would impose 25% tariffs on imports coming from Canada and Mexico, until those countries crack down on drugs - particularly fentanyl - and migrants who cross the border.
The proposed measures may also be in violation of the terms and conditions of a free trade agreement between the United States, Mexico, and Canada.
Trump also announced "an additional 10% tariff on top of any other tariffs" for imports from China.
Angelo Kourkafas is an investment strategist with Edward Jones Investments. He said that these threats were primarily designed to extract concessions.
Canada exports the majority of its products to the United States. This includes energy products.
Energy sector losses were 2.2%, despite higher oil price, and led all sectors, as markets assessed Trump’s goal to increase U.S. Crude Production.
The Canadian dollar fell to its lowest level since May 2020.
Kourkafas stated that a lower Canadian dollar may cause inflationary concerns with imported goods.
The Bank of Canada stated that inflation will fade back into the background as the annual rate settles at 2%. This will allow consumers and businesses to invest and spend with confidence.
A poll revealed that the TSX was expected to increase in 2025 due to lower borrowing costs, a lower valuation and a cheaper market than the U.S.
Alimentation Couche-Tard has said that it will continue to pursue a partnership with Japan's Seven & i.
The company's shares dropped 1% on Monday after it reported earnings that were below expectations for the third quarter. (Reporting and editing by Maju Samuel in Bengaluru, Shreya biswas and Nikhil Sharma)
(source: Reuters)
