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Investing.com -- Canada’s main stock index futured pointed downward ahead of trading on Monday after suffering its worst day in trading since March 2020 on Friday. Investors have sold off since U.S. President Donald Trump’s announcement of a raft of new tariffs last Wednesday, with many seeing an all-out trade war and global recession on the horizon.
S&P/TSX 60 Futures indicated a 2.3% decline as of 8:45 ET Monday, following Friday's fall of 65 points, or 4.4%.
On Friday, the Toronto Stock Exchange’s S&P/TSX Composite index had fallen 1,142 points, or 4.7%, its largest fall since March 2020, during the start of the Covid-19 pandemic. Thursday, the index finished down 971.4 points or 3.8%, which was at the time the largest drop for the index since June 2020.
Trump announced his broadest slate of tariffs to date on Wednesday, saying he would slap a baseline 10% duty on all foreign imports into the U.S. and impose greater levies on several longstanding trading partners in a bid to respond to perceived unfair trade practices.
The broad tariffs take effect on April 5, with the country-specific hikes starting April 9.
In turn, China announced a 34% tariff on all U.S. imports on Friday, coming into effect April 10.
On Friday, Trump spoke of a "constructive call" with the General Secretary of the Communist Party of Vietnam, To Lam. Trump has doubled down on his trade policy, saying “I think it’s going very well.”
Trump also urged Federal Reserve Bank Chairman Jerome Powell to cut interest rates, asking the Chairman to "stop playing politics." Powell spoke on Friday, stating that the economic impact of tariffs is "likely larger than expected" and signaling a cautious monetary policy.
Trump had previously rolled out a string of other tariffs that are now in effect, including a 25% import levy on goods from Mexico and Canada not deemed to be in compliance with the U.S.-Mexico-Canada Agreement -- a trade accord signed during Trump’s first term. Energy products and potash received a 10% tariff. Neither country will be subject to any new tariffs beyond these.
A 25% tariff on Canadian steel and aluminum also remains in place.
In response, Canada Prime Minister Mark Carney declared on Thursday that Canada is implementing 25% tariffs on all vehicles and non-Canadian vehicle content imported from the U.S. that are not compliant with the CUSMA (USMCA) trade pact. Carney alleged that total funds raised from Canada’s tariffs could reach CAD$8 billion, and all funds will go to the autoworkers and companies affected.