Japan consumer confidence index and machine tool orders
(10 a.m. ET) U.S. wholesale trade for February.
(2 p.m. ET) U.S. Fed minutes for March 19 release are released.
Earnings include: Cogeco Inc.; Cogeco Communications Inc.; Delta Air Lines Inc.
—
Thursday April 10
China CPI and PPI
Japan bank lending
(8:30 a.m. ET) Canadian building permits for February. Estimate is a decline of 1.5 per cent month-over-month.
(8:30 a.m. ET) U.S. initial jobless claims for week of April 5.
(8:30 a.m. ET) U.S. CPI for March. The Street is projecting a rise of 0.1 per cent from February (versus a gain of 0.2 per cent in the previous month) and up 2.6 per cent year-over-year.
(2 p.m. ET) U.S. Treasury budget for March.
Earnings include: Progressive Corp.
—
Friday April 11
Germany CPI
UK GDP, trade deficit, industrial production and manufacturing production
(8:30 a.m. ET) U.S. PPI for March. The consensus is a month-over-month gain of 0.2 per cent and up 3.1 per cent year-over-year.
(10 a.m. ET) U.S. University of Michigan Consumer Sentiment Index for April (preliminary reading).
Earnings include: Bank of NY Mellon; BlackRock Inc.; JPMorgan Chase & Co.; Morgan Stanley; Wells Fargo & Co .
Context: U.S. Tariffs and Loblaw’s Exposure (April 2025)
In early 2025, trade tensions flared as the U.S. imposed new tariffs on imports from Canada, prompting Ottawa to retaliate with tariffs on a broad range of U.S. goods
bnnbloomberg.ca. As Canada’s largest grocer, Loblaw Companies Limited (TSX: L) faced questions about how these tariffs would affect its business. Notably, Loblaw has relatively limited direct exposure to U.S. imports – less than 10% of its supply comes from the U.S., mainly fresh produce
bnnbloomberg.ca. CEO Per Bank acknowledged that “if tariffs are applied on produce, there’s where we will be mostly impacted”
bnnbloomberg.ca. In other words, the most direct impact of U.S. tariffs for Loblaw is higher costs on imported fruits and vegetables, especially important during Canada’s winter when produce imports rise
bnnbloomberg.ca. Beyond produce, most of Loblaw’s grocery inventory is domestically sourced or from non-U.S. suppliers, which buffers the company from direct tariff pain.
Channels of impact on Loblaw’s business include:
Supply Chain Costs: Tariffs make certain imported products (like U.S. produce) more expensive, raising Loblaw’s input costs. The company warned that tariffs “will eventually impact prices for certain products we sell – and that could come within a week or two for some items, such as fresh produce”bnnbloomberg.ca. In other categories, price increases may take ~6 weeks to appear as existing pre-tariff inventory is sold throughbnnbloomberg.ca. Loblaw’s management has been clear that once cheaper inventory is depleted, replacement stock will reflect the tariff-inflated costs, likely meaning higher shelf prices for shoppers.
Consumer Behavior: The trade war has spurred a “buy Canadian” sentiment among shoppers. Loblaw has capitalized on this by highlighting domestic products in its stores. The company even added a new “swap and shop” feature to its loyalty app to help customers find Canadian-made alternatives for imported goodsmoneysense.ca. These efforts are “paying off,” with the grocer seeing a “significant uplift in sales of products identified as prepared in Canada,” according to CEO Per Bankmoneysense.ca. In other words, tariff fears are indirectly boosting sales of Canadian goods at Loblaw, as patriotic and value-conscious consumers shift away from pricier imports. Some analysts have noted that Canadian grocers like Loblaw could even gain market share if consumers shy away from U.S.-based retailers (like Walmart or Costco) in favor of domestic chains during the trade conflictmoneysense.ca.
Operational Costs (Indirect): The tariff battle is exerting broader economic pressures that affect Loblaw. A key factor is currency: a trade war tends to weaken the Canadian dollar, which “will likely be inflationary” for food prices since many commodities (and winter produce) are priced in USDbnnbloomberg.caca.rbcwealthmanagement.com. Loblaw has noted that even products made in Canada could see cost increases “if any of their ingredients are sourced from the U.S., while changing commodity prices and the weak Canadian dollar are also factors” driving up costsbnnbloomberg.ca. Thus, U.S. tariffs indirectly raise Loblaw’s cost of goods via currency effects and global commodity inflation, not just the tariffed items alone. Moreover, economists project the trade dispute could dampen Canada’s GDP growth and employment, which might make consumers more price-sensitiveca.rbcwealthmanagement.comca.rbcwealthmanagement.com. In a softer economy, shoppers tend to trade down to discount stores and private labels – a trend that actually plays to Loblaw’s strengths in the discount segment.
Company Response and Statements
A shopper browses a Loblaw-owned No Frills discount grocery store. Loblaw is actively leveraging its discount banners and Canadian sourcing to shield consumers from tariff effects.
Loblaw’s management has been proactive in addressing tariff impacts both internally and in customer-facing ways. Company executives have emphasized plans to mitigate the effect of tariffs on shoppers and suppliers:
Faster Supplier Price Reviews: Anticipating cost increases, Loblaw alerted its suppliers that it would accelerate the processing of price increase requestsbnnbloomberg.ca. Normally, the grocer might take up to 12 weeks to review vendor price changes, but it cut that timeline in half to help suppliers manage rising costs due to tariffsbnnbloomberg.ca. “The goal was to outline steps we can take mutually to navigate potential challenges… in light of the proposed tariffs,” said Loblaw spokeswoman Catherine Thomas, adding that the company will “do everything it can to reduce the impact of tariffs on customers.”bnnbloomberg.ca. This suggests Loblaw is working closely with suppliers so that necessary cost increases (from tariffs) are handled efficiently, ensuring store shelves remain stocked even if input prices climb.
Sourcing and Inventory Strategies: To blunt the direct hit of tariffs, Loblaw is leaning more on domestic and alternative sources. The company has been “looking for new ways to secure as much food as possible that is grown, made, or prepared in Canada,” CEO Per Bank saidretail-insider.com. In 2025 Loblaw onboarded dozens of new Canadian suppliers to replace U.S. imports where possibleretail-insider.com. For products that must still come from the U.S., Loblaw built up inventory ahead of the tariffs. “We have inventory of U.S. products in our distribution centres, purchased before the tariffs… that means many products will not be impacted until we sell what we already have on hand,” Per Bank explainedbnnbloomberg.ca. This stockpiling buys Loblaw a bit of time before price hikes hit consumers. The company is also exploring overseas suppliers for certain fruits, vegetables, and specialty goods to diversify its supply chainretail-insider.com, aiming to find “comparable quality and price” from non-U.S. sources to avoid drastic price jumps. However, Loblaw acknowledges some reliance on U.S. produce, especially in winter, will remain hard to fully replacebnnbloomberg.ca.
Pricing Transparency and Branding: Perhaps Loblaw’s most public-facing response is its decision to flag tariff-related price increases in-store. In March 2025, Loblaw announced it will put a special “tariff” symbol (a letter T inside a triangle) on shelf price tags of products that became more expensive due to the trade warbnnbloomberg.cabnnbloomberg.ca. This symbol lets shoppers know which products are sourced from the U.S. and are increasing in price because of tariffsbnnbloomberg.ca. Per Bank assured customers that “when tariffs come off, any tariff pricing changes will be entirely removed”bnnbloomberg.ca. In tandem, Loblaw is adding maple leaf symbols to highlight products “prepared in Canada”bnnbloomberg.ca. By clearly labeling Canadian-made items (and making them easy to find through apps and signage), Loblaw is encouraging consumers to switch to domestic alternatives. This approach serves two purposes: it maintains customer trust (by being transparent that tariffs – not greed – are driving certain price hikes) and it potentially shifts demand toward non-tariffed, Canadian goods. In essence, Loblaw is using the tariff situation to promote its private labels and local products, which could soften any hit to sales volumes on imported goods.
Public and Government Engagement: Loblaw’s CEO and executives have been vocal in the public discourse on tariffs. Per Bank took to LinkedIn to calm shoppers, saying Canadians “shouldn’t expect to see prices in stores rise right away” due to existing inventoriesbnnbloomberg.ca. The company has also been in dialogue with policymakers – urging the Canadian government to consider exemptions for essential grocery items in its counter-tariffsretail-insider.com. By advocating for relief on key food imports, Loblaw hopes to shield consumers (and itself) from the worst of the price shocks, aligning itself with customers’ interests amid the trade turmoil.
Share Price Movements and Market Sentiment
Loblaw’s share price has been on a strong upswing in 2025, with tariff developments playing a paradoxical role. After a brief dip in February (when Loblaw’s quarterly profit was hit by a one-time loyalty program charge, unrelated to tariffs
moneysense.ca), the stock rebounded sharply. By the end of March 2025, Loblaw (L.TO) was making new highs around the C$200+ level
marketbeat.com. In fact, on March 31, the stock reached a 52-week high of about C$203
marketbeat.com. This momentum only accelerated as the U.S.-Canada tariff clash escalated: on April 3, 2025 – a day when trade war fears sent the broader TSX index down nearly 4% – Loblaw’s stock surged to a fresh record high
reuters.com. Investor money rotated defensively into consumer staples, making that the only sector in Toronto to finish up on April 3. Loblaw, as a supermarket heavyweight, “moved to a fresh record high” even as most other stocks plunged
reuters.com. (On that day, shares traded above C$210 intraday, an all-time high, before closing around C$209.
reuters.com) This contrasting performance highlights investor sentiment: markets view Loblaw as a relative safe haven amid tariff turmoil, expecting that people will keep buying groceries regardless of economic headwinds. In other words, tariffs that hurt manufacturers or tech firms may actually benefit Loblaw’s stock in the short run, as investors seek the stability of food retail.
Analyst commentary supports this optimistic view. Many equity analysts have maintained “Buy” or overweight ratings on Loblaw, citing its limited U.S. import exposure and its ability to pass on costs. As of early 2025, the consensus analyst price target for L.TO was roughly C$199 (just below the then-market price) with a “Moderate Buy” rating on the stock
marketbeat.com. RBC Capital Markets, for example, reiterated Loblaw as a top pick in the consumer sector, calling it “well-positioned” in a tariff environment due to its value-focused offerings
ca.rbcwealthmanagement.com. RBC’s research noted that grocery retailers typically source over 20% of their sales in produce (often priced in USD), so a weaker Canadian dollar from tariffs will push food inflation higher
ca.rbcwealthmanagement.com. However, Loblaw is seen as best equipped to handle this: it has the highest penetration of discount banners and private-label products among Canadian grocers, which means it can capture budget-conscious shoppers trading down and protect its profit margins
ca.rbcwealthmanagement.com. “Already value-focused consumers are likely to continue to favour discount channels… Loblaw enjoys the highest exposure to discount/private label,” RBC analysts wrote
ca.rbcwealthmanagement.com. In practice, this means Loblaw can pass through higher costs to customers (via modest price increases) while actually gaining customer traffic in its discount stores (No Frills) and increasing sales of its cheaper in-house brands. This dynamic is bullish for Loblaw’s earnings resilience. Other analysts have similarly pointed out that Loblaw and its domestic peers could absorb some frustrated shoppers who might otherwise shop in U.S.-based stores – a shift driven both by patriotism and price dynamics in a tariff-laden market
Investor sentiment, overall, has been positive on Loblaw amid the trade dispute. Despite concerns about general consumer inflation, investors appear confident that Loblaw can manage tariff impacts without severe damage to its bottom line. The company’s forthright communication about tariffs (such as the “T” symbols and assurances to roll back prices when possible) may have further bolstered confidence, showing that Loblaw is on top of the issue. It’s worth noting that grocery chains have a history of weathering cost inflation by adjusting prices, and 2025’s situation seems no different – analysts widely expect grocers to pass on most tariff-related costs to consumers
ca.rbcwealthmanagement.com. In the stock market, Loblaw is benefiting from this expectation. Its shares have significantly outperformed more tariff-exposed sectors (like technology or industrials) in the first half of 2025, reflecting a defensive “risk-off” trade by investors
In summary, the current U.S. tariffs are affecting Loblaw indirectly more than directly. Direct exposure (e.g. higher costs on U.S. produce imports) is real but relatively small in scope, given Loblaw’s predominantly Canadian supply chain
bnnbloomberg.ca. Indirectly, however, the tariffs are reshaping Loblaw’s operating environment: from nudging consumer behavior (greater demand for Canadian goods) to influencing currency and inflation trends that impact input costs
bnnbloomberg.ca. Loblaw’s management has responded assertively – securing alternate supplies, transparently tagging tariff-affected prices, and fast-tracking supplier pricing support
bnnbloomberg.ca – all aimed at defending its customer base and margins. So far, the strategy appears effective: Loblaw is turning the tariff challenge into an opportunity to promote its discount and private-label strength, and investors have rewarded the company with a rising share price. The stock’s recent record highs amid a trade-war-rattled market underscore that investors see Loblaw as insulated from, or even advantaged by, the tariff situation
reuters.com. Going forward, stakeholders will be watching how sustained tariff pressures play out – whether grocery price inflation will hit volumes, or if Loblaw can continue balancing higher costs with savvy merchandising. For now, Loblaw’s positioning as a defensive, Canada-first retailer has helped it navigate the tariff turbulence with strong investor confidence and relatively minimal damage to its business fundamentals.
Rogers Communications Inc. RCI-B-T +1.06%increase has struck a definitive agreement to sell a minority stake in its wireless infrastructure for $7-billion to a consortium led by New York-based Blackstone Inc. that also includes four of the country’s largest pension plans.
Last October, Rogers announced it planned to raise money and repay debt by selling a portion of its wireless backhaul business to an institutional investor, but did not disclose the investor’s identity.
On Friday, the Toronto-based company spelled out the details of the transaction, an innovative financing for a Canadian company that is expected to pave the way for further infrastructure sales at debt-heavy domestic telecom platforms.
Rogers is selling a 49.9-per-cent equity interest in its wireless unit to the Blackstone consortium, which also includes the Canada Pension Plan Investment Board, Caisse de dépôt et placement du Québec, the Public Sector Pension Investment Board and British Columbia Investment Management Corp., four of the country’s largest pension funds.
The Blackstone consortium will only hold a 20-per-cent voting interest in the new business, while Rogers will own 50.1-per-cent of the equity and an 80-per-cent voting interest.
“This transaction will strengthen the company’s investment grade balance sheet by reducing our borrowings and unlocking the unrecognized value of critical assets,” said Glenn Brandt, Rogers’ chief financial officer, in a press release. The transaction is expected to close in the second quarter of 2025.
The news was received positively by analysts Friday morning.
“We are encouraged to see a deal structure that on the surface seems to tick all of the boxes with respect to size, cost and impact,” said RBC analyst Drew McReynolds in a Friday morning note to investors.
In another note, Scotiabank analyst Maher Yaghi estimated the deal will reduce Rogers’ debt to EBITDA ratio by approximately 0.7 times. At the end of last year, Rogers debt was 4.5 times its EBITDA.
“All in, we expect the stock to react positively today as leverage is reduced with minimal negative impact on free cash flow,” he said.
Rogers took on debt to acquire rival Shaw Communications Inc. for $20-billion in 2023 and plans to spend $4.7-billion this year to acquire BCE Inc.’s stake in Maple Leaf Sports & Entertainment.
Blackstone, one of the world’s largest private equity funds with more than US$1-trillion in assets under management, is a significant investor in Canadian infrastructure and real estate and plans to continue committing capital to the country as a trade war plays out between the two intertwined North American economies.
“Canada is a hugely important market for investment at Blackstone and that has not changed,” said president Jon Gray in a recent interview with The Globe and Mail. “Obviously you have to be mindful of export-oriented businesses, but we are actively looking at a range of opportunities in the country today.”
Blackstone co-founder and chief executive officer Stephen Schwarzman openly backed U.S. President Donald Trump’s 2020 election campaign and is a significant donor to the Republican party and its leader.
The federal government hiked scrutiny of cross-border transactions last month in the wake of Mr. Trump’s decision to launch a trade war and campaign for an economic union that would make Canada the 51st state.
The structure of the Rogers transaction, with significant Canadian content, is meant in part to deal with regulatory concerns regarding control of telecom infrastructure.
Telus Corp. is using a similar structure to attempt to sell a 49-per-cent stake in its cell phone tower business, according to a pitch book on the potential transaction distributed by TD Securities, Telus’s financial adviser.
The transaction announced on Friday gives Rogers the right to repurchase the Blackstone consortium’s interest at any time between the 8th and 12th anniversaries of the deal’s closing.
Once launched, the wireless business is expected to pay the Blackstone consortium approximately $400-million annually for the next five years.
Mr. Yaghi estimated that, after accounting for cash taxes and potential interest savings tied to the debt repayment from the transaction, that figure drops to around $260-million to $280-million. On a net basis, this implies a maximum annual cash outlay of about $150-million over that period, he said.
Rogers said the Blackstone consortium’s investment is expected to be treated as equity by credit rating agencies Moody’s Investors Services, Inc., S&P Global Inc., and DBRS Ltd. Mr. Brandt said: “With this transaction, Rogers will have issued an aggregate $9-billion of equity-valued capital since year-end which is expected to reduce leverage by almost 1 turn.”
Rogers wireless infrastructure is an asset the company has pledged as security to lenders. On Friday, Rogers said as part of the sale to the Blackstone consortium, it would seek consent for amendments to the terms of its debt from the holders of its outstanding senior notes.
Gold prices fell further from recent record highs on Friday despite a number of positive catalysts.
Spot gold fell 0.7 percent to $3,092.92 per ounce in early European trade after hitting a record high in early April. U.S. gold futures were down 0.2 percent at $3,114.31.
Selling pressure in gold could be primarily due to profit booking after a significant run over the last 12 months. Bullion is up nearly 35 percent over the last year.
The recent surge was driven by tariff concerns, geopolitical risks, declining U.S. dollar, and growing inflation forecasts.
According to UBS, the latest tariff measures unveiled by U.S. President Trump may knock down U.S. economic growth by 2 percentage points this year and raise inflation close to 5 percent.
A U.S.-based analyst from Morningstar has forecast a 38 percent decline in gold prices in the coming years, despite an uncertain economic environment.
On the contrary, some financial institutions remain optimistic about bullion’s future. Bank of America has predicted that gold could rise to $3,500 per ounce in the next two years. Goldman Sachs expects a year-end price of $3,300 per ounce.
As growth worries mount, there is now increased speculation that the Federal Reserve could accelerate interest rates to make it easier for U.S. companies and households to borrow and spend.
The release of the monthly U.S. jobs report as well as remarks by Federal Reserve Chair Jerome Powell may influence trading later in the day.
Oil prices were down around 4 percent on Friday, and were on track for their worst week in months on concerns about a global recession that could weigh on oil demand.
Benchmark Brent crude futures tumbled 3.6 percent to $67.63 in early European trade while WTI crude futures were down 3.8 percent at $4.38.
Both contracts declined more than 6 percent on Thursday after U.S. President Donald Trump announced significantly harsher-than-expected tariffs.
According to UBS, the latest tariff measures unveiled by Trump may knock down U.S. economic growth by 2 percentage points this year and raise inflation close to 5 percent.
JPMorgan has raised the probability of a global recession this year to 60 percent, from a previous 40 percent.
Adding to investor anxiety, OPEC+ unexpectedly increased the supply by three times the planned amount in May.
A statement from OPEC said Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman have agreed to increase production by 411,000 barrels per day in May.
The oil cartel noted the increase in production comprises the increment originally planned for May in addition to two monthly increments.
Goldman Sachs has significantly lowered its oil price forecasts for 2025 and 2026, citing OPEC+’s increased production and the potential for a global recession.
Nonfarm payrolls in March increased 228,000 for the month, up from the revised 117,000 in February and better than the Dow Jones estimate for 140,000.
Health care was the leading growth area, consistent with prior months. The industry added 54,000 jobs, almost exactly in line with its 12-month average.
Average hourly earnings increased 0.3% on the month, in line with the forecast, while the annual rate of 3.8%, the lowest level since July 2024.
China on Friday struck back at the U.S tariffs imposed by President Donald Trump with a slew of countermeasures including extra levies of 34 per cent on all U.S. goods and export curbs on some rare earths, deepening the trade war between the world’s two biggest economies.
Beijing also imposed restrictions on about 30 U.S. organizations, mostly in defence-related industries, adding to the already two dozen U.S companies punished over Trump’s tariffs.
Beijing’s sweeping retaliation comes after Trump slapped the world’s No. 2 economy with additional 34 per cent tariffs on Chinese goods, bringing the total new levies this year to 54 per cent. Trump also closed a trade loophole that had allowed low-value packages from China to enter the U.S duty-free.
“The U.S move is not in line with international trade rules, seriously undermines China’s legitimate and lawful rights and interests, and is a typical unilateral bullying practice,” China’s finance ministry said.
China called the new round of U.S tariffs a “blatant” violation of World Trade Organization rules and have requested consultations at the WTO.
Trump accused China of panicking in a comment on Truth Social.
“China played it wrong, they panicked – the one thing they cannot afford to do!,” he wrote on Friday.
China’s finance ministry matched U.S. duties with additional tariffs of 34 per cent on all U.S. goods from April 10, on top of the 10 per cent-15 per cent tariffs it imposed on some U.S. agriculture goods in March and 10 per cent-15 per cent tariffs on some energy and farming machinery in February.
Agricultural trade took a deeper hit as Chinese customs imposed an immediate suspension on imports of U.S. sorghum from C&D (USA) INC, as well as inbound shipments of poultry and bone meal from three U.S. firms.
China’s biggest imports from the U.S. are soybeans, oilseeds and grains, amounting to $13.4-billion in 2024, as well as $14.7-billion of various fuels and $15.3-billion of electrical machinery, according to U.S. trade data.
“With 34 per cent tariff it will not be possible for U.S. agricultural products to enter China. It is an opportunity for other exporters like Brazil and Australia to increase their market share in China,” said Ole Houe, director of advisory services at IKON Commodities in Sydney.
“As the old Chinese saying goes: ‘Courtesy demands reciprocity’,” said Guo Jiakun, a spokesperson at the Chinese foreign ministry, in a post on Facebook after the announcement of the Chinese countermeasures.
Beijing also announced controls on exports of medium and heavy rare-earths including samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium to the United States, effective April 4.
It added 16 U.S. entities to its export control list, which prohibits exports of dual-use items to the affected firms. The affected include 15 companies in industries including defence and aerospace, as well as non-profit group Coalition For A Prosperous America, which in the past had advocated for the Trump administration to decouple the U.S. economy from China.
Another 11 U.S. entities were added to the “unreliable entity” list, which allows Beijing to take punitive actions against foreign entities. The targeted firms include Skydio Inc. and BRINC Drones over arms sales to democratically governed Taiwan, which China claims as part of its territory.
It also launched an anti-dumping probe into imports of certain medical CT tubes from the U.S. and India, as well as an investigation into Dupont China Group, a subsidiary of the U.S. firm DuPont, for alleged violation of China’s anti-monopoly law.
“The application of the export controls on these key materials plus some of these additions to the unreliable entity list reflects China’s growing tool-kit to retaliate in trade wars,” said the Mercator Institute for China Studies’ lead analyst for the economy Jacob Gunter.
The Chinese yuan has dropped to its lowest level in seven weeks and stock markets slumped on Thursday after Trump unveiled his reciprocal tariffs that were particularly heavy on China.
Trump has ordered the U.S. Trade Representative to determine whether China was living up to its commitments under the 2020 “phase 1″ U.S.-China trade agreement by April 1.
The deal required China to increase purchases of U.S exports by $200-billion over a two-year period, but Beijing failed to meet its targets when the COVID-19 pandemic struck.
China bought $154-billion in U.S goods in 2017, before the trade war began, Chinese customs data shows, and that figure rose to $164-billion last year.
“I used to buy some American products, but if the price increases I might buy less,” said Huang Zhe, 24, who works in China’s luxury sector.
Global markets slid further and North American indexes were on track for another day of crushing losses Friday after China responded to U.S. President Donald Trump’s latest set of tariffs with some of their own.
Canada’s main stock index dropped on Friday, led by losses in energy and mining stocks, amid a global selloff deepened by China’s countermeasures.
At 12 p.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 996.98 points, or 4.1%, at 23,338.79.
The index ended down 3.8% at 24,335.77 on Thursday, its lowest closing level since March 13. It was the biggest decline for the index since June 2020, shortly after the start of the COVID-19 crisis.
The S&P 500 was down 3.8% in midday trading, after earlier dropping more than 5%, following its worst day since COVID wrecked the global economy in 2020. The Dow Jones Industrial Average was down 1,349 points, or 3.3%, and the Nasdaq composite was 3.8% lower.
So far there are few, if any, winners in financial markets from the trade war. European stocks saw some of the day’s biggest losses, with indexes sinking roughly 4%. The price of crude oil tumbled to its lowest level since 2021. Other basic building blocks for economic growth, such as copper, also saw prices slide on worries the trade war will weaken the global economy.
China’s response to U.S. tariffs caused an immediate acceleration of losses in markets worldwide. The Commerce Ministry in Beijing said it would respond to the 34% tariffs imposed by the U.S. on imports from China by imposing a 34% tariff on imports of all U.S. products beginning April 10. The United States and China are the world’s two largest economies.
Markets briefly recovered some of their losses after the release of Friday morning’s U.S. jobs report, which said employers accelerated their hiring by more last month than economists expected. It’s the latest signal that the U.S. job market has remained relatively solid through the start of 2025, and it’s been a linchpin keeping the U.S. economy out of a recession.
But that jobs data was backward looking, and the fear hitting financial markets is about what’s to come.
“The world has changed, and the economic conditions have changed,” said Rick Rieder, chief investment officer of global fixed income at BlackRock.
The central question is: Will the trade war cause a global recession? If it does, stock prices will likely need to come down even more than they have already. The S&P 500 is down roughly 15% from its record set in February.
Much will depend on how long Trump’s tariffs stick and what kind of retaliations other countries deliver. Some of Wall Street is holding onto hope that Trump will lower the tariffs after prying out some “wins” from other countries following negotiations. Otherwise, many say a recession looks likely.
For his part, Trump has said Americans may feel “some pain” because of tariffs, but he has also said the long-term goals, including getting more manufacturing jobs back to the United States, are worth it. On Thursday, he likened the situation to a medical operation, where the U.S. economy is the patient.
“For investors looking at their portfolios, it could have felt like an operation performed without anesthesia,” said Brian Jacobsen, chief economist at Annex Wealth Management.
But Jacobsen also said the next surprise for investors could be how quickly tariffs get negotiated down. “The speed of recovery will depend on how, and how quickly, officials negotiate,” he said.
Vietnam said its deputy prime minister would visit the U.S. for talks on trade, while the head of the European Commission has vowed to fight back. Others have said they were hoping to negotiate with the Trump administration for relief.
Trump criticized China’s retaliation on Friday, saying on his Truth Social platform that “CHINA PLAYED IT WRONG, THEY PANICKED – THE ONE THING THEY CANNOT AFFORD TO DO!”
On Wall Street, stocks of companies that do lots of business in China fell to some of the sharpest losses.
DuPont dropped 11.3% after China said its regulators are launching an anti-trust investigation into DuPont China group, a subsidiary of the chemical giant. It’s one of several measures targeting American companies and in retaliation for the U.S. tariffs.
GE Healthcare got 12.3% of its revenue last year from the China region, and it fell 13.3%.
In the bond market, Treasury yields continued their sharp drop as worries rise about the strength of the U.S. economy. The yield on the 10-year Treasury tumbled to 3.94% from 4.06% late Thursday and from roughly 4.80% early this year. That’s a major move for the bond market.
The Federal Reserve could cut its main interest rate to relax the pressure on the economy, as it was doing late last year before pausing in 2025. But it may have less freedom to move than it would like.
Fed Chair Jerome Powell said in written remarks being delivered in Arlington, Virginia that tariffs could also drive up expectations for inflation. That could be even more damaging than high inflation itself, because it can drive behavior that begins a vicious cycle that only worsens inflation. U.S. households have already said they’re bracing for sharp increases to their bills.
“Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem,” Powell said.
That could indicate a hesitance to cut rates because lower rates can give inflation more fuel.
In stock markets abroad, Germany’s DAX lost 4.3%, France’s CAC 40 dropped 3.7% and Japan’s Nikkei 225 fell 2.8%.
Canada shed 33,000 jobs in March, the worst month for the labour market in three years, as the threat of U.S. tariffs weighed on business confidence and slowed hiring.
Job declines were widespread across industries, and concentrated in full-time positions and private sector employment, Statistics Canada reported Friday. The unemployment rate ticked up to 6.7 per cent from 6.6 per cent in February. Bay Street analysts had expected a small increase in employment.
The March Labour Force Survey, conducted from March 9 to 15, is the first piece of hard data showing the effect of U.S. President Donald Trump’s trade war against Canada.
It’s too early to see a direct impact of U.S. tariffs, which were imposed throughout March and early April on Canadian goods that don’t comply with the United States-Mexico-Canada Agreement, as well as on steel, aluminum and automobiles. However, the threat of tariffs has shaken Canadian consumer and business confidence, which appears to be weighing on the labour market.
Following the publication of the data, financial markets upped their bets on another interest rate cut from the Bank of Canada at its next meeting on April 16. Traders now put the odds of another quarter-point cut at around 65 per cent, much higher than in recent weeks, according to LSEG data. Another cut would take the central bank’s policy rate to 2.5 per cent.
“The wheels may be starting to come off the Canadian labour market,” Andrew Grantham, Canadian Imperial Bank of Commerce senior economist, wrote in a note to clients. He noted that Canada’s job market had been fairly solid through the second half of last year and into January.
“However, the concerning recent trend, combined with the likelihood of further weakness ahead as US tariffs start to impact hiring decisions, leans towards further reductions in interest rates from the Bank of Canada, although the timing will depend on next week’s business and consumer surveys as well as global risk sentiment,” Mr. Grantham wrote.
Statscan said layoff rates from February to March were in line with typical levels for that time of year, suggesting the weakness was more the result of slower hiring and normal attrition than outright layoffs.
The Canadian numbers stood in contrast to U.S. jobs data, also released Friday. U.S. employers added 228,000 new positions in March, well ahead of Wall Street expectations of 140,000. Although earlier payroll figures for January and February were revised down by 48,000.
This suggests that the U.S. labour market was in relatively good shape as Mr. Trump embarked on his protectionist push to remake the global trading system. But that could change quickly.
Mr. Trump’s decision to impose sweeping tariffs on America’s trading partners this week has tanked financial markets and raised the odds of a recession. On Friday, China retaliated against the U.S. with a 34-per-cent duty on all U.S. goods, raising the prospect of spiralling global trade war.
“It’s an historical footnote on the economy that was before ruinous trade wars erupted,” Derek Holt, head of capital markets economics at Bank of Nova Scotia wrote in a note to clients about the U.S. jobs numbers.
In Canada, the Statscan data showed an unequal impact across provinces. Ontario lost around 28,000 jobs and the unemployment rate ticked up two notches to 7.5 per cent. Alberta and Quebec lost around 15,000 and 5,000 jobs respectively. Saskatchewan was the outlier, adding around 6,000 jobs, while employment remained fairly flat in most other provinces.
The wholesale and retail sector lost 29,000 jobs while the information, culture and recreation sector lost 20,000. Employment fell by a smaller amount in business support services, agriculture, manufacturing and construction. This was partially offset by increases in several sectors, including “other services” and transportation and warehousing.
“While US tariffs will be the obvious culprit for the fall in employment in March, two-thirds of the decline was concentrated in the services sector, suggesting that other factors were at play,” Bradley Saunders, North America economist at Capital Economics wrote in a note to clients.
“Nonetheless, the broad-based weakness in last month’s Labour Force Survey does not bode well for the outlook, especially with timely surveys showing firms’ hiring intentions falling sharply.”
Total hours worked rose 0.4 per cent following a 1.3 per cent decline in February – one of the few bright spots in the data. Average hourly wages were up 3.6 per cent year-over-year compared to 3.8 per cent in February.
A shopper browses a Loblaw-owned No Frills discount grocery store. Loblaw is actively leveraging its discount banners and Canadian sourcing to shield consumers from tariff effects.