Canadian and U.S. stock markets opened lower on Thursday, erasing gains from the previous day after U.S. President Trump announced a suspension of certain tariffs on Wednesday.

As of the latest report, the S&P/TSX Composite Index fell 728.68 points to 22,998.35.

The Dow Jones Industrial Average on Wall Street dropped 1,093.47 points to 39,514.98, while the S&P 500 index fell 193.13 points to 5,263.77 and the Nasdaq Composite Index fell 754.42 points to 16,370.56.

Stocks surged on Wednesday after Trump said on social media that he would suspend "reciprocal" tariffs on many countries.

However, the benchmark tariff rate of 10% remains in effect, and Trump raised the tariff rate on goods from China to 125%.

All eyes on Wall Street are focused on what will happen next.

In a report about the president's tariff decision, strategist Bhanu Baweja of UBS wrote: "Trump has backed down, but the damage is not yet fully eliminated."

Carney suspends campaign for third time

Canadian Prime Minister Mark Carney suspended his federal election campaign for the third time to address the escalating global trade war initiated by U.S. President Trump.

Carney is currently running as the leader of the Liberal Party, but retains the authority of an incumbent prime minister during the federal election. He stated that he would return to Ottawa on Friday to convene meetings of the Cabinet Committee on Canada-U.S. Relations and national security officials.

Carney said that Trump's suspension "is a welcome respite for the global economy," but added that "the impact of other tariffs and the threat of future tariffs are already being felt around the world and domestically."

Carney said at a campaign event in Brampton, Ontario, on Thursday: "Therefore, the risks facing our economy have never been higher."

Ford expresses shock

Ontario Premier Doug Ford expressed "shock" at Canada's exclusion from President Trump's 90-day tariff suspension plan.

Ford told CNN journalist Wolf Blitzer on Thursday: "We are shocked by our exclusion. You know, we are each other's top customer — we need to get through this and bring certainty to the people of the United States and Canada."

On Wednesday, Trump called off last week's announcement of so-called "reciprocal" tariffs, but still imposed a 10% baseline tax on these countries.

Although Canada was exempted from these tariffs, the 25% tariffs on automobiles, steel, aluminum, and goods not compliant with the USMCA trade agreement remain in place.

Canada has already imposed retaliatory tariffs on $6 billion worth of U.S. goods, and if the U.S. trade war continues, Canada is prepared to impose an additional $9.5 billion in tariffs.

Ford said that while being excluded from last week's tariff announcement brought relief, the ongoing tariffs on Canadian goods are unacceptable.

Ford said on Thursday: "The fact is that taxing Canada is taxing Americans, which is something we least want to see for the American people." He added that he still believes that if the U.S. ends the trade war, the Canadian government will cancel the retaliatory tariffs.

Ford said that the trade war is having a chilling effect on multiple industries on both sides of the border, with tourism being particularly hard hit.

"We know that cross-border traffic has dropped significantly. Flights to the U.S. have also decreased dramatically. Isn't it unfortunate for two countries and two groups of people who love each other?"

In March, a tourism monitoring agency reported that demand for flights between Canada and the U.S. had "collapsed," with cross-border flight bookings dropping by more than 70% this spring and summer.

Earlier this month, a tourism official in New York expressed concern about the decline in cross-border traffic and noted that visitor numbers from north of the border plummeted in February following the outbreak of the trade war.

Nine models of Canadian cars to see price hikes

A recent report from a U.S. business consulting group said that after the tariff increase, the prices of Canadian-made cars entering U.S. dealerships will rise by $2,500 to $15,000 depending on the model.

The organization pointed out that the price increase may slow down sales of Canadian cars, leading to reduced production or factory shutdowns by automakers.

"The automotive industry will shrink. We expect a significant number of job losses in both the U.S. and Canada," said Ilhan Geckil, managing director of Anderson Economic Group in New York.

He predicted that U.S. car sales this year will decrease by 2 million units, falling from 16 million to 14 million. He estimated that Canada's car sales in 2024 will reach 1.8 million units, and the tariffs could reduce sales by approximately 200,000 units.

BrightDrop electric commercial vans produced at the Cami Assembly Plant in Ingersoll, Ontario, which use a large amount of steel and aluminum (also subject to tariffs), will be one of the models most affected, with prices expected to rise by approximately $15,000.

Other affected models and the price increases per vehicle:

  • Toyota RAV4 (Woodstock): Increase of approximately $7,500 to $8,000
  • Lexus NX 350 and 500 (Cambridge): Increase of approximately $12,000
  • Pacifica and Chrysler minivans (Windsor): Increase of approximately $4,500
  • Dodge Charger (Windsor): Increase of approximately $4,500
  • Honda CR-V (Alliston): Increase of approximately $7,500 to $8,000
  • Honda Civic (Alliston): Increase of approximately $2,500 to $4,500
  • Chevrolet Silverado pickup trucks (Oshawa): Increase of approximately $12,000
  • Ford Super Duty pickup trucks (Oakville): Increase of approximately $12,000

Experts believe that after enjoying discounts for using U.S.-made parts, most imported Canadian vehicles will face a 12.5% U.S. tariff. This is lower than Japanese, South Korean, and European imports, which will face a 25% U.S. tariff.

"We may be affected less than other countries. Costs will rise, but the increase in costs for Canadian vehicles may be smaller because we use U.S. components."

"Tariffs are taxes, and ultimately consumers pay. It's very chaotic now, and we need to stop tariff policies. No one can make plans, and this only hinders business operations."

Original source: https://www.toutiao.com/article/7491885430917382696/

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