Canadian Stocks Slide Amid Deepening Canada-U.S. Trade War

(RTTNews) - Canadian stocks moved lower on Wednesday, adding to previous four sessions of losses, as the U.S. administration escalated the trade war with Canada by modifying its tariffs upwards on several products and banning a lot of Canadian imports into the U.S.

After opening higher than yesterday's close, today the benchmark S&P/TSX Composite Index lost momentum soon and traded firmly negative throughout the rest of the session before settling at 35,906.56, down by 216.49 points (or 0.60%).

Only two of the 11 sectors posted gains today, with the energy sector leading the pack.

Complicating the trade dispute with Canada further, in a retaliatory move against Canada's dollar-for-dollar tariffs on U.S. imports, which kicked in on September 8, the U.S. administration announced a ban on a large section of Canadian imports into the U.S.

U.S. President Donald Trump ordered new restrictions on Canadian products and raised tariffs on several others.

According to the new executive order, multiple Canadian products including mattresses, motor boats, golf carts, all-terrain vehicles, animal hides, etc., are now set to face a 50% tariff, beginning September 15.

A separate set of orders have been invoked to ban imports of certain type of alcoholic beverages made in Canada as well as dairy products including whey, molasses, nonalcoholic beer, an array of alcoholic drinks, and larger capacity motorcycles and mopeds. This ban commences from September 29.

In a strongly worded message through Truth Social, Trump criticized Canada of ripping the U.S. off for years and restricting the U.S. companies from selling into Canada even while it broadly accesses the U.S. markets.

Trump ordered the General Services Administration and the U.S. Trade Representative to remove Canadian-origin products from GSA's multiple award schedules (worth more than $50 billion a year) until Canada reciprocates a fair-trade practice for the U.S. farmers and businesses.

The trade war began by mid-July when Trump accused Canada of offering a discriminatory treatment against U.S. imports and signed a rare executive order to impose 50% tariffs on multiple Canadian imports into the U.S.

The announcement led to a series of negotiations between Canada and the U.S. to formulate a workable trade deal and avoid the tariffs.

While the Canadian side was headed by Canada-U.S. Trade Minister Dominic LeBlanc, the U.S. side was led by the U.S. Trade Representative Jamieson Greer. However, despite several rounds of discussions, efforts to present an agreement to persuade Trump from revoking the tariffs failed. The levies took effect since August 22.

Besides these tariffs, Trump expanded the U.S. levies on automobiles and automotives from Canada to the U.S. to as high as 50%. These tariffs begin to kick in only from January 1, 2027.

As a mark of retaliation, Canada's Prime Minister Mark Carney announced "dollar-for-dollar" tariffs on U.S. imports. These duties on nearly $20 billion worth of U.S. imports came into effect from September 8.

On Tuesday, Carney addressed the nation stating that the tariffs come with a cost but were necessary to safeguard the interests of Canadian businesses and workers.

In an interview with CBC News, U.S. Trade Representative Jamieson Greer stated that the U.S. could consider imposing tit-for-tat tariffs on Canada.

The White House adopted these new measures taking the Canada-U.S. trade conflict to a higher level.

The Middle East tensions continue to escalate with both the U.S. and Iran aggressively trading attacks.

As a result, the Strait of Hormuz remains closed for the seventh month while diplomatic efforts by Qatar to bring the nations for negotiations has not paid off.

Investors are also pricing in the recent jobs data in the U.S. to speculate that the U.S. Federal Reserve shall opt for either holding the interest rates or hiking them.

Major sectors that gained in today's trading were Energy (0.99%) and Materials (0.90%).

Among the individual stocks, The North West Company Inc (7.84%), Vermilion Energy Inc (2.90%), Whitecap Resources Inc (2.63%), Spartan Delta Corp (2.61%), Baytex Energy Corp (2.52%), Lithium Americas Corp (6.52%), and Southern Cross Gold Consolidated Ltd (3.75%) were the prominent gainers.

Major sectors that lost in today's trading were IT (1.97%), Industrials (1.22%), Consumer Discretionary (1.09%), Financials (1.07%), and Communication Services (0.96%).

Among the individual stocks, Shopify Inc (5.35%), Lightspeed Commerce Inc (3.49%), Open Text Corporation (2.92%), Dye and Durham Limited (2.56%), and Bird Construction Inc (4.61%) were the notable losers.