Global markets are taking another heavy hit!
The U.S. plans to double the tax on Canadian softwood lumber, which will increase from the current 14.4% to 34.45%. This new tariff is set to take effect before Trump further expands his trade war, putting pressure on Canada's lumber industry and the U.S. home building materials market.
Following two consecutive days of sharp declines on Wall Street last week, global markets fell sharply on Monday. President Trump stated that he would not retreat from his comprehensive new tariff policy that has caused global trade turmoil.
The Dow Jones Industrial Average opened with a 3.18% drop on Monday, as global markets remained volatile under the shadow of Trump's tariff policies.
Source: Global News
European stocks followed Asian markets lower, with Germany's DAX index falling by 6.5% to close at 19,311.29 points; France's CAC 40 index dropping 5.9% to close at 6,844.96 points; and the UK's FTSE 100 index declining 5% to close at 7,652.73 points.
Trump's announcement last week of "reciprocal" tariffs on global trading partners triggered widespread selling. To date, Trump has made no concessions on his tariff plan.
Before the market opened on Monday, Trump posted on Truth Social: "Don't be weak! Don't be foolish! Don't be a panic party member! (A new political party composed of weak and foolish people!)"
Source: Truth Social
Despite global market turbulence, the president shows no intention of changing policy direction.
Trump said on Sunday that he will not make concessions on comprehensive tariffs on imports from most countries unless trade balance is achieved with various nations.
Trump told reporters aboard Air Force One that he does not want the global market to fall, but he is not worried about this large-scale sell-off. He added: "Sometimes you have to take medicine to get better."
Source: youtube@skynews.com
Shortly before 7 a.m. on Monday, Trump posted on Truth Social, defending his tariff policies. Regarding the latest market dynamics, he said: "Oil prices are falling, interest rates are falling (the sluggish Federal Reserve should cut rates!), food prices are falling, there is no inflation, and now, through the implemented tariffs, the United States is recovering billions of dollars every week from these long-term 'bullying' countries... making America great again!"
Source: Truth Social
Trump made the above remarks as global financial markets appeared set to continue their sharp decline on Monday morning.
On Sunday evening, U.S. stock index futures fell, with markets continuing to be volatile due to tariff issues. The S&P 500 futures dropped 2.5%, the Dow Jones Industrial Average futures fell 2.1%, and the Nasdaq futures dropped 3.1%. Even Bitcoin, which had been relatively stable last week, fell nearly 6% on Sunday.
Tariffs doubled to 34.45%!
U.S. eyes Canadian softwood again:
Building materials prices soar!
The U.S. government is preparing to increase the import tariff on Canadian softwood lumber to 34.45%, nearly doubling the current rate of 14.4%. This new tariff will take effect before Trump further expands his trade war, putting pressure on Canada's lumber industry and the U.S. home building materials market.
Currently, the combined anti-subsidy and anti-dumping tax rate on Canadian softwood lumber imported into the U.S. is 14.4%, which was set last year. According to the latest memorandum from the U.S. Department of Commerce, this rate will increase by a full 20 percentage points, reaching 34.45%.
Although Trump has not yet officially imposed the new round of tariffs on Canadian timber, he has initiated a "national security investigation," claiming that "the U.S. does not need Canadian timber at all."
Source: 51 journalist shot
American residential builders have warned that if more tariffs are imposed on Canadian timber, it will push up the cost of new home construction, placing a heavier burden on ordinary American families.
However, the Trump administration still believes that Canada is "deliberately dumping" and "disrupting market fairness," accusing provincial governments in Canada of artificially lowering logging fees ("stumpage") to subsidize exports to the U.S. market.
Canada strongly denies this claim.
Kurt Niquidet, chairman of the BC Softwood Lumber Trade Council, said: "Our forest system is based on market principles, and timber is sold through open and transparent bidding processes."
This tax hike is part of Trump's second round of "trade wars" after re-election. He has already imposed tariff sanctions on Canadian goods that do not meet the standards of the USMCA agreement and levied 25% high tariffs on steel, aluminum, vehicles, and other products.
Source: Global News
BC Premier Eby strongly criticized the U.S. move as an "attack on forestry workers and BC province," and said he would meet with Prime Minister Mark Carney on Monday to discuss countermeasures.
In addition, Frederic Verreault, vice president of Quebec's Chantiers de Chibougamau, said: "At current prices, this industry has hit a dead end."
"A 2x4 piece of wood now sells for only $3, compared to $10 in 2022—but our production costs keep rising."
The central bank warns: Canada may face a prolonged economic recession!
Two reports released by the Bank of Canada on Monday showed that both businesses and individuals in the country have become more pessimistic about the economic outlook than before, and the proportion of those expecting a recession in 2025 has risen significantly compared to one quarter ago.
According to reports by local English media Toronto Star and CP24: The Bank of Canada's Business Outlook Survey released on Monday showed that currently 32% of businesses expect Canada to experience an economic downturn within the next year, compared to only 15% in the previous two quarters.
The report pointed out that "uncertainty in financial, economic, and political conditions remains the top concern for businesses, and has surged sharply this quarter." The proportion of businesses expecting sales growth over the next year fell from 53% in the fourth quarter of 2024 to 43%.
Source: 51 journalist shot
The Bank also reported: "Under the current economic environment, many businesses are delaying important decisions, such as those related to investment and hiring, until the economic outlook becomes clearer." The proportion of businesses planning to hire new employees fell from 45% in the fourth quarter last year to 32%, and the proportion of businesses planning to invest in machinery and equipment also declined.
On the other hand, two-thirds of businesses believe that if comprehensive tariff policies are implemented, their costs will rise, so many businesses will raise their sales prices, which will undoubtedly push up inflation.
Similarly, the Bank of Canada's Canadian Survey of Consumer Expectations also showed a similar trend.
The survey found that 67% of consumers expect an economic recession in 2025, a significant increase from 47% in the previous quarter.
This online survey indicates that Canadians are becoming increasingly pessimistic about their job security and financial situation, and they are more likely than average to miss debt repayments.
Bank officials attributed this result to the "general uncertainty" caused by the escalating trade conflict with the U.S. Due to the tariff war initiated by the U.S., Canadians expect their living costs to worsen. In the first quarter of 2025, consumers' short-term inflation expectations rose for the first time since 2022.
Local experts said that these two latest reports reveal the negative impact of U.S. tariff policies on business and consumer sentiment, highlighting the severity of the current economic situation.
It is reported that the Bank of Canada will release its next interest rate decision on April 16th.
Original source: https://www.toutiao.com/article/7490790550308782644/
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