Canada’s main stock index fell on Tuesday, as investors priced in U.S. President Donald Trump’s announcement of additional tariffs on Canadian metals.
The Toronto Stock Exchange’s S&P/TSX composite index was down 0.28% at 24,313.03.
Trump on Tuesday doubled his planned tariff on all steel and aluminum products coming into the United States from Canada, bringing the total to 50%, in response to the Ontario province placing levies on electricity coming into the U.S.
“It’s obviously not good. The market is anticipating a slowdown in future growth and it’s trying to price it in,” said Allan Small, senior investment advisor at Allan Small Financial Group with iA Private Wealth.
“The President is sticking to his guns and doing what he said he was going to do and (he is) not really, at this point in time, concerned about the ramifications.”
TSX falls more than 1% as global trade war concerns linger
Investors are also looking towards the Bank of Canada’s monetary policy decision on Wednesday, with traders expecting the central bank to support the economy by cutting interest rates by 25 basis points.
The benchmark index fell to a four-month low on Monday due to worries that Trump’s tariffs on key trade partners such as Canada and Mexico have triggered risks of recession for all three countries.
“There’s a very clear risk off mentality at the moment,” said Josh Sheluk, portfolio manager at Verecan Capital Management.
The materials index gained 2.5%, largely due to a 1% rise in gold prices. Demand for the safe-haven asset soared amid concerns that global trade tensions stemming from U.S. tariffs could hurt economic growth.
Precious metal companies such as New Gold and Aya Gold & Silver were among the biggest gainers on the main index, rising 7.2% and 10.3%, respectively.
On the other hand, healthcare and consumer discretionary led losses, falling 2.3% and 1.7%, respectively.
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