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Canadian National Railway Co. CNR-T +0.22%increase reported its net income inched up to $1.17-billion during its second quarter compared with last year, as it said the trade uncertainty is making it difficult for it to provide investors with an outlook. 

The Montreal-based company says revenue fell about 1 per cent, to $4.27-billion compared with $4.33-billion a year earlier. 

Diluted earnings per share for the quarter came in at $1.87, up from $1.75 a year earlier. 

CN lowered its 2025 forecast for adjusted diluted earnings per share growth, saying it now expects growth in the mid to high single-digit range. 

A previous estimate from CN expected adjusted diluted earnings per share to increase between 10 and 15 per cent for 2025.

CN says it is removing its 2024-26 financial outlook given continued uncertainty surrounding trade and tariff uncertainty. 

U.S. President Donald Trump announced a trade framework with Japan on Tuesday, placing a 15-per-cent tax on goods imported from that nation.

“This Deal will create Hundreds of Thousands of Jobs – There has never been anything like it,” Trump posted on Truth Social, adding that the United States “will continue to always have a great relationship with the Country of Japan.”

The President said Japan would invest “at my direction” US$550-billion into the U.S. and would “open” its economy to American autos and rice. The 15-per-cent tax on imported Japanese goods is a meaningful drop from the 25-per-cent rate that Trump, in a recent letter to Japanese Prime Minister Shigeru Ishiba, said would be levied starting Aug. 1.

With the announcement, Trump is seeking to tout his ability as a dealmaker – even as his tariffs when initially announced in early April led to a market panic and fears of slower growth that for the moment appear to have subsided. Key details remained unclear from his post, such as whether Japanese-built autos would face a higher 25-per-cent tariff that Trump imposed on the sector.

Tony Keller: Trump’s trade policy is completely nonsensical, and entirely clear

But the framework fits a growing pattern for Trump, who is eager to portray the tariffs as win for the U.S. His administration says the revenues will help reduce the budget deficit and more factories will relocate to America to avoid the import taxes and cause trade imbalances to disappear.

But the wave of tariffs continues to be a source of uncertainty about whether it could lead to higher prices for consumers and businesses if companies simply pass along the costs. The problem was seen sharply Tuesday after General Motors reported a 35-per-cent drop in its net income during the second quarter as it warned that tariffs would hit its business in the months ahead, causing its stock to tumble.

As the Aug. 1 deadline for the tariff rates in his letters to world leaders is approaching, Trump also announced a trade framework with the Philippines that would impose a tariff of 19 per cent on its goods while American-made products would face no import taxes. The president also reaffirmed his 19-per-cent tariffs on Indonesia.

The U.S. ran a US$69.4-billion trade imbalance on goods with Japan last year, according to the Census Bureau.

America had a trade imbalance of US$17.9-billion with Indonesia and an imbalance of US$4.9-billion with the Philippines. Both nations are less affluent than the U.S. and an imbalance means America imports more from those countries than it exports to them.

The countries that received Trump’s tariff letters – and where things stand now

The President is set to impose the broad tariffs listed in his recent letters to other world leaders on Aug. 1, raising questions of whether there will be any breakthrough in talks with the European Union. At a Tuesday dinner, Trump said the EU would be in Washington on Wednesday for trade talks.

“We have Europe coming in tomorrow, the next day,” Trump told guests.

The president earlier this month sent a letter threatening the 27 member states in the EU with 30-per-cent taxes on their goods to be imposed starting on Aug. 1.

The Trump administration has a separate negotiating period with China that is currently set to run through Aug. 12 as goods from that nation are taxed at an additional 30-per-cent baseline.

Treasury Secretary Scott Bessent said he would be in the Swedish capital of Stockholm next Monday and Tuesday to meet with his Chinese counterparts. Bessent said his goal is to shift the American economy away from consumption and to enable more consumer spending in the manufacturing-heavy Chinese economy.

“President Trump is remaking the U.S. into a manufacturing economy,” Bessent said on the Fox Business Network show “Mornings with Maria.” “If we could do that together, we do more manufacturing, they do more consumption. That would be a home run for the global economy.”

The income gap between the country’s highest and lowest income households reached a record high in the first quarter of 2025, Statistics Canada said Wednesday.

The agency said the difference in the share of disposable income between households in the top 40 per cent of the income distribution and the bottom 40 per cent grew to 49 percentage points in the first three months of the year.

“It’s not a surprise with the economic uncertainty we’ve been experiencing and the stress in the labour market. Unemployment is rising, and it’s really rising in particular for young people – young graduates coming out of school, they’re not finding their first job,” said Katherine Scott, a senior researcher focused on gender equality and public policy at the Canadian Centre for Policy Alternatives.

“This is all contributing to a lot of economic distress, and it is turning up in the data.”

Statistics Canada said the measure has increased each year after the onset of the COVID-19 pandemic.

For the first quarter of 2025, it said the increase came as the highest income households gained from investments, while the lowest income households saw wages decline.

Scott said many individuals at the higher end of the income scale didn’t see their incomes decline during the pandemic, with many staying in their jobs.

“But more importantly, they were in a position to take advantage of the huge run-up of the investment markets that happened at that time and have continued to increase ever since,” Scott said.

Those in the bottom 20 per cent of the income distribution saw the weakest growth in disposable income in the first quarter at 3.2 per cent compared with a year ago as their average wages edged down 0.7 per cent.

The lowest income households also saw the largest drop in net investment income as their investment earnings fell 35.3 per cent, while net transfers received, including increased government support measures, rose 31.2 per cent.

The average disposable income for those in the top 20 per cent of the income distribution increased at the fastest pace of any income group in the first quarter of 2025 as they benefited from a 7.7 per cent increase compared with a year earlier.

The highest income households saw a 4.7 per cent increase in average wages and a 7.4 per cent gain in investment income.

Statistics Canada said the wealth gap also increased as the top 20 per cent of the wealth distribution accounted for 64.7 per cent of Canada’s total net worth in the first quarter, averaging $3.3 million per household.

The bottom 40 per cent of the wealth distribution accounted for 3.3 per cent of net worth, averaging $85,700 per household.

Scott highlighted that following the 2008-09 recession, there was a “real discussion” regarding rising income inequality, which doesn’t appear to be taking place currently.

“This kind of information, the largest gap ever, it’s a wake-up call. We can’t sustain it, we have to pay attention to the structure of our economy and the distribution of that,” she said.

“We have to grow the pie, but we have to talk about the distribution of the pie. It matters that people are able to live a decent quality of life with dignity. I think that’s a really important public policy goal, which seems to be lost in the current conversation.”

Alimentation Couche-Tard Inc. ATD-T +0.32%increase has abandoned its roughly US$46-billion effort to take over 7-Eleven parent Seven & i Holdings Co. SVNDY +0.95%increase, blasting its Japanese rival for failing to engage in meaningful talks toward a potential deal.

Laval, Que.-based Couche-Tard’s move puts an end to its nearly year-long effort to pursue Seven & i, bringing finality to a situation that has dragged down the Canadian company’s stock price. The Japanese company had been frosty to the proposal from the start, raising further questions about whether Japanese corporations remain as closed to mergers and acquisitions deal-making as they have been historically.

“There has been no sincere or constructive engagement from 7&i that would facilitate the advancement of any proposal, contrary to comments made by 7&i representatives” as recently as this month, Couche-Tard chair Alain Bouchard and chief executive Alex Miller said in a note to the Japanese company’s board released late Wednesday.

“Rather, you have engaged in a calculated campaign of obfuscation and delay, to the great detriment of 7&i and its shareholders. We believe this approach reinforces our concerns about your approach to governance.”

The pulled bid is a big blow for Mr. Bouchard, who has twice previously eyed a purchase of his largest competitor and harboured ambitions to create one of the world’s biggest retailers. But it will be a relief for Couche-Tard shareholders, with a probable jump in its shares on Thursday.

“Investors have symptoms of deal fatigue,” Stifel analyst Martin Landry had said before Wednesday’s news.

Couche-Tard’s all-cash offer was worth 2,600 yen per share, a 47.6 per cent premium to the date its interest became public. Seven & i shareholders will now be left hoping management can deliver something of equal or greater value. As part of their standalone strategy, Seven is selling its underperforming supermarkets and plans to list a portion of its U.S. retail operation to fund a massive stock buyback.

Couche-Tard, which controls the retail banner Circle K, struck a nondisclosure agreement with Seven & i in April, a crucial step. But in a sign things were not moving along as expected, Mr. Miller was cagey when asked last month about the likelihood of a deal and whether his Japanese counterparts were truly responsive.

In Wednesday’s letter, the Couche-Tard executives pulled back the curtain on what was happening behind the scenes.

They said they repeatedly sought to speak to Seven & i’s founding Ito family, a major shareholder in the company, but that they have not been open to any conversation. They described one management meeting with Seven & i in Japan as “tightly scripted” and said their Japanese counterparts were not willing to answer basic queries about industry dynamics. They also said that after 10 weeks of diligence, just 14 total files relating to Seven & i’s U.S. business were provided, while “none of our critical questions” were answered.

“As we have expressed many times, we do believe that fully combining our two companies is the most straightforward and effective way to maximize value to all stakeholders,” the Couche-Tard executives said in the letter.

“We believe this combination has the ability to enhance that path. However, we are not able to effectively pursue this combination without deeper and genuine further engagement from 7&i leadership and the special committee.”

Seven & i confirmed that Alimentation Couche-Tard “unilaterally decided to end discussions” and withdraw its proposal. It denied it acted improperly.

“While we are disappointed by ACT’s decision, and disagree with their numerous mischaracterizations, we are not surprised,” the Japanese retailer said in a statement posted on its web, adding that there have been significant changes in the global economy, exchange rates and financing markets since Couche-Tard made its first proposal.

Seven & I’s special committee “consistently engaged in good faith and constructively with ACT to explore the possibility of reaching a deal,” the Japanese company said. “At the same time, we were always honest about the extraordinary antitrust hurdles a potential transaction would face.”

Why this money manager is buying Nestle, Dollarama and selling Couche-Tard

It would have been a monster merger, combining the two biggest convenience-store players in the United States at a time the industry is facing mounting pressure from other retail rivals and consumers are closely watching their spending. The sector remains highly fragmented in that country, with the top 10 chains making up only 19 per cent of the total number of stores.

Couche-Tard leaders revealed in the letter that they proposed alternatives to a takeover of Seven & i in its entirety, including buying the company’s international business outside of Japan or taking a 40-per-cent minority stake in the Japanese business. That would have been a way for the Canadian company to learn more about the Asia market, one of its priorities.

They said Seven & i proposed another option, offering its international business to Couche-Tard in return for equity ownership in the Canadian company’s shares. That offer was rejected by Couche-Tard as undermining the “operational prospects of the combined business.”

Japan has long been seen as resistant to foreign takeovers. 7-Eleven’s status as a beloved institution and part of daily life in Japan made Couche-Tard’s bid to win over the company’s stakeholders all the more challenging.

Japan’s government in 2023 issued new guidelines to the corporate sector in an effort to loosen cultural barriers to foreign investment. But Couche-Tard’s move to throw in the towel on its 7-Eleven vision after extensive overtures suggests the government’s message did little to open doors to foreign interests.

The sheer size of the potential takeover had scared some Couche-Tard investors, who have expressed concerns about equity dilution if a big sale of shares is needed to fund the deal. The shares are down 20 per cent from their 52-week high.

At the moment, the key issue for Couche-Tard is that the company is “not delivering growth that investors have become accustomed to, it is not repurchasing shares, and there is an equity issuance overhang,” National Bank of Canada analyst Vishal Shreedhar said in a June 4 research note.

“We anticipate these issues to resolve over the near term.”

Jobless rate falls to 6.9% as economy gains 83,000 jobs in June, mostly part-time

Canada’s unemployment rate drops for first time since January | Financial Post