U.S. Treasury yields were mixed on Monday as investors weighed U.S. President Donald Trump’s new tariffs on goods from key trade partners and their impact on the economy.
One basis point is equal to 0.01%, and yields and prices move in opposite directions.
Investors are weighing the impact of tariffs on trade partners, with Trump signing an executive order on Saturday imposing 25% tariffs on imports from Mexico and Canada and a 10% duty on China. The U.S. does roughly $1.6 trillion in business with the three countries.
Canada has responded by threatening its own tariffs on the U.S., while Mexico is looking to impose levies on U.S. goods, and the Chinese government is filing a lawsuit with the World Trade Organization.
Investors can also expect a slew of manufacturing and jobs data through the week. The S&P Global US Manufacturing PMI and the Manufacturing ISM report will both be published on Monday and will offer insights into the health of the manufacturing sector.
On Tuesday, the Job Openings and Labor Turnover Survey, referring to all open positions on the last business day of the month, will be released. Investors will also monitor speeches from Federal Reserve Bank of Atlanta President Raphael Bostic and Fed Bank of San Francisco President Mary Daly.
The January nonfarm payrolls report will be out on Friday and will provide clarity about the employment picture for 2025. Economists polled by Dow Jones forecast that 175,000 jobs were added last month, while the unemployment rate is predicted to have remained unchanged at 4.1%.
Investors around the world are closely monitoring the potential impact of President Trump’s tariffs on global partners. With escalating trade tensions between the US and countries like China, Mexico, and the European Union, uncertainty in the markets is growing.
The imposition of tariffs on goods imported from these countries has already led to retaliatory measures, sparking fears of a potential trade war. Investors are concerned about the potential ripple effects on supply chains, consumer prices, and economic growth.
As the situation continues to unfold, investors are carefully evaluating their portfolios and considering the potential risks and opportunities that may arise from these tariffs. Many are also looking for ways to hedge against the volatility in the markets.
It remains to be seen how these trade tensions will be resolved and what impact they will have on the global economy. In the meantime, investors are bracing themselves for a bumpy ride as they navigate the uncertain waters of international trade policy under the Trump administration.
On Saturday, President Donald Trump made good on his promise to impose steep tariffs on America’s three largest trading partners — Canada, China and Mexico.
Economists warn that these moves will negatively impact American businesses and consumers, many of whom are still reeling from the sharp rise in inflation in recent years.
Here’s where a tariff on Mexican and Canadian goods could hit Americans hardest:
Cars and car parts: The US imported $87 billion worth of motor vehicles and $64 billion worth of vehicle parts from Mexico last year, not accounting for December, according to Commerce Department data. Motor vehicles were also the second-largest good the US imported from Canada last year through November, for a total of $34 billion.
Food and alcoholic beverages: Mexico and Canada supply a significant share of several key food categories. For example, Mexico is the largest supplier of fruit and vegetables to the US, while Canada leads in exports of grain, livestock and meats, poultry and more.
Electronics, toys, appliances: Consumer electronics are among the top goods the US imported from China last year, according to federal trade data. That includes cellphones, TVs, laptops, video game consoles, monitors and all the components that power them.
China also is a major supplier of home appliances. Those, along with toys and footwear, are particularly exposed to Trump’s tariff threats. More than half of shoes sold in the United States are made in China, according to the Footwear Distributors & Retailers of America.
The United States is also reliant on China for toys and sporting equipment, including items such as footballs, soccer balls and baseballs. The United States gets 75% of its imported toys and sports equipment from China.
President Trump recently made a bold move by signing tariffs on some of America’s top trade partners in an effort to enact his ‘America First’ agenda. This decision has sparked controversy and concerns among many countries, as it could potentially lead to a trade war.
The tariffs, which target goods from countries such as China, Mexico, and Canada, are part of Trump’s plan to protect American jobs and industries. However, critics argue that these measures could harm the global economy and lead to retaliation from other countries.
It remains to be seen how these tariffs will impact trade relations and the overall economy. As tensions rise, many are left wondering what the future holds for international trade under Trump’s presidency. Stay tuned for updates on this developing story.
Fans at a Toronto Raptors game on Sunday continued an emerging trend of booing the American national anthem at sporting events in Canada.
Fans of the NBA’s lone Canadian franchise booed the US anthem before the Raptors’ game against the Los Angeles Clippers at the Scotiabank Arena in downtown Toronto. Similar reactions broke out on Saturday night at NHL games in Ottawa and Calgary, where the Senators and Flames faced the Minnesota Wild and Detroit Red Wings respectively. Those games came hours after Donald Trump made his threat of import tariffs on Canada a reality.
After Raptors fans initially cheered the 15-year-old girl singing the anthems, they booed throughout her performance of The Star-Spangled Banner. At the end, mixed boos and cheers could be heard before the crowd erupted in applause for the Canadian anthem, O Canada. Three of the five starters on the Raptors are American and they glanced at each other as the boos rang out. Sportsnet reporter Michael Grange, who was at the game, wrote on X that fans emphasised the word “free” in the Canadian anthem.
On Saturday, Trump placed tariffs on goods from Canada, Mexico and China after claiming the three countries allow immigrants and illegal drugs into the US. In addition, energy imported from Canada, including oil, natural gas and electricity, will be taxed at a 10% rate.
Canadian prime minister Justin Trudeau and Mexico’s president have ordered retaliatory tariffs on goods from America in response.
The booing of The Star-Spangled Banner in Canada is rare, but not unheard of especially when tied to world events. In the early 2000s, fans at games in Canada booed to show their disapproval of the US-led war in Iraq.
Trump has been the subject of booing himself at sports events. During his first term as president he was jeered and greeted with “lock him up” chants by Washington Nationals fans during the 2019 World Series. He has also been cheered loudly at college football games.
In a shocking turn of events, Toronto Raptors fans expressed their disapproval of the US national anthem by booing during the pre-game rendition. The protest comes in response to President Donald Trump’s recent announcement of imposing tariffs on Canadian goods, sparking tensions between the two countries.
The Raptors fans, known for their passionate support of the team, made a bold statement by booing the national anthem before the game against the New York Knicks. Many fans held signs denouncing the tariffs and calling for peaceful resolutions between the US and Canada.
The protest highlights the impact of political decisions on sports and the unity of fans in standing up for what they believe in. The Raptors organization has yet to comment on the incident, but it is clear that the fans’ message was heard loud and clear.
As the NBA continues to be a platform for social activism, the Toronto Raptors fans have shown that they will not stay silent in the face of injustice. Time will tell how this protest will influence future games and the relationship between the US and Canada.
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“The Star-Spangled Banner” was once again booed in Canada ahead of a sporting event.
The latest anti-American display took place at the Scotiabank Arena before the Toronto Raptors took on the Los Angeles Clippers. Fans booed the American national anthem as a 15-year-old female sang it. A mix of boos and cheers were heard before she received a resounding applause for the Canadian national anthem, “O, Canada.”
Raptors forwards, from left, Bruce Brown, Scottie Barnes and Chris Boucher react as fans boo the U.S. national anthem before the Los Angeles Clippers game in Toronto, Sunday, Feb. 2, 2025.(Frank Gunn/The Canadian Press via AP)
The theme of Canadians booing the American anthem began Saturday night as the Ottawa Senators and the Calgary Flames hosted NHL games.
The boos seemingly occurred as President Donald Trump followed through on his promise to place tariffs of 25% on imports from Canada and Mexico and 10% on imports from China. Any energy resources from Canada would be hit at a 10% rate.
In a statement obtained by Fox News Saturday, the Trump administration said the order is in response to an “extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl, (that) constitutes a national emergency.”
Canada’s maple leaf logo at center court before a game between the Washington Wizards and Raptors at Scotiabank Arena in Toronto, Oct. 20, 2023.(John E. Sokolowski-USA Today Sports)
Ahead of Prime Minister Justin Trudeau announcing his resignation, Trump said he would “love” if Canada could become the “51st state.”
Trudeau has since lamented the tariffs that the Trump administration has levied.
In a fact sheet released by the White House on Saturday, the U.S. is implementing tariffs against Canada, Mexico and China to hold them accountable “to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country.” This “extraordinary threat,” the White House said, “constitutes a national emergency under the International Emergency Economic Powers Act.”
The national anthems are sung at Canadian Tire Centre before the NHL game between the Ottawa Senators and the Los Angeles Kings on Oct. 14, 2024, in Ottawa, Canada.(André Ringuette/NHLI via Getty Images)
However, Trudeau claimed that “less than 1% of fentanyl and less than one% illegal crossings into the United States come from Canada.”
FOX Business’ Christopher Guly and the Associated Press contributed to this report.
Ryan Gaydos is a senior editor for Fox News Digital.
The recent decision by President Trump to impose tariffs on Canadian goods has sparked outrage among Raptors fans, who booed the ‘Star-Spangled Banner’ before a recent game. This act of defiance is just the latest example of anti-American sentiment in Canada, as tensions between the two countries continue to rise.
Many Canadians view Trump’s tariffs as unjust and harmful to their economy, leading to a sense of frustration and resentment towards the United States. The booing of the American national anthem at the Raptors game was a symbolic gesture of protest against what many see as aggressive and unfair trade policies.
The incident highlights the growing divide between the two nations and the impact that political decisions can have on international relations. As the trade war between the US and Canada escalates, it is likely that we will see more displays of anti-American sentiment in the future.
A few hours after US President Donald Trump announced that he would impose steep tariffs on Canada, hockey fans in the capital Ottawa booed the Star-Spangled Banner during a National Hockey League game against a visiting US team.
On Sunday, during a National Basketball League game between the Toronto Raptors and the Los Angeles Clippers, it happened again, continuing throughout the song and almost drowning out the 15-year-old’s singer’s arena performance.
The vocal displeasure from usually respectful fans is a clear sign of Canadians’ deep dismay at Trump’s move to hit its nearest ally with punitive taxes, a move that threatens to spark an unprecedented trade war on the North American continent.
The 25% tariffs imposed by Trump on all Canadian imports into the US – with a lower 10% levy on energy – are set to take effect on Tuesday.
And they come as President Trump doubles down on his push – no longer dismissed as a joke – for Canada to join America and become the 51st state.
While many economists project the tariffs will also drive up costs for Americans on everyday essentials, from gas to groceries, Canada is the more exposed trade partner. If they last for months, the country could tip into a painful economic recession.
Anger is building – and with it, a desire to mount a fightback that has been echoed by political leaders in the country of 40 million.
“Many among us will be affected by this, and we will have some hard times. I ask you to be there for each other,” said Prime Minister Justin Trudeau in a Saturday evening address. “Now is the time to choose Canada.”
Some Canadians have already heeded the calls for solidarity. On social media, guides are circulating on how to avoid American-made products at the grocery store.
Others are posting about cancelling travel plans to the US, or boycotting the country all together.
In some Canadian provinces – namely Ontario, the largest by population – American booze will be pulled off the shelves indefinitely starting on Tuesday.
This is in addition to a total of C$155bn ($105bn; £86bn) of American goods that Canada has said it will tariff in retaliation, including vegetables, clothing, sports equipment, perfume and other items. Goods originating from Republican-led states, like Florida orange juice, are specifically being targeted.
The US imports more of its oil from Canada than any other country, and Trudeau’s government has signalled “all options remain on the table” for further retaliation.
A ‘destabilising’ moment for Canada
Trump’s follow-through on his threat of steep tariffs – which were long speculated to be a negotiation tactic to get concessions on border security – have bewildered Canadians, who have enjoyed close economic, social and security ties to the US for decades.
“It’s a shock,” Michael Ignatieff, the former leader of Canada’s Liberal Party, told the BBC.
“We’re into a new world, in which the question on whether you can trust America becomes the fundamental question in foreign policy for every country.”
Pierre Poilievre, leader of Canada’s opposition Conservative Party, called the tariffs on Sunday “massive, unjust and unjustified.”
“Canada is the United States’ closest neighbour, greatest ally and best friend,” he said, noting that Canada fought alongside the US in two world wars, as well as in Korea and Afghanistan. “There is no justification whatsoever for this treatment.”
Prime Minister Trudeau questioned in his Saturday address why the US would target Canada instead of looking to “more challenging parts” of the world.
A portion of his speech was directly addressed to Americans, and he too, pointed to a history of shared bloodshed. “We have fought, and died, alongside you,” Trudeau said.
Thomas Juneau, a professor at the University of Ottawa with a focus on national security, told the BBC that Trump’s tariffs “undoubtedly represent an earthquake in Canada-US relations.”
“This is extremely destabilising for Canada,” Prof Juneau said. “As a country, we have massively benefited from our extremely close trade and security partnership with the US for decades.”
While the trade battle would likely force Canada to look for partners elsewhere, it ultimately can’t escape geography, he said. It will remain reliant on the economic superpower next door.
“That is why Canada must absolutely now focus on salvaging the relationship as much as possible,” Prof Juneau said.
An unclear, costly fight ahead
The big unknown remains how long the US will keep the tariffs in place, and what steps Canada could take to appease the Trump administration, which has said it expects action on cross-border fentanyl trafficking and illegal migration.
TD Economics projects that the longer the tariffs remain in place, the worse the impact will be. Canada could enter a recession in five to six months, and its unemployment rate could hit more than 7%.
Theo Argitis, managing director of the Ottawa-based public affairs firm Compass Rose Group, said the unknowns had left Canada no choice “but to hit (Trump) back hard.”
“At the end of the day, we don’t even really know why he’s doing this,” Mr Argitis told the BBC.
Trump says the flow of fentanyl, a highly potent and deadly drug, into the US from Canada and Mexico, is one key reason. US officials say the levies will remain in place “until the crisis is alleviated.”
In response, the Canadian government has noted that less than 1% of fentanyl and illegal border crossings into the US come from Canada. It has offered to spend an additional C$1.3bn to secure the US-Canada border
But Trump has also spoken publicly about his frustration with the trade deficit between Canada and the US, and more broadly his view that tariffs could be a source of revenue for Washington’s coffers.
On Sunday, he wrote on Truth Social that the US does not need Canadian products, and said the US pays “hundreds of billions of dollars to subsidize Canada.”
“Without this massive subsidy, Canada ceases to exist as a viable country,” Trump wrote, before repeating his view that Canada should instead become a US state.
He has warned that the White House will enact harsher penalties on Canada should it choose to retaliate. For now, Canada has chosen to try and inflict some targeted pain on its more powerful neighbour, even if the economic scales are tipped against it.
“We prefer to solve our disputes with diplomacy,” Trudeau told his country on Saturday. “But we are ready to fight when necessary.”
As tensions rise between the United States and Canada over President Trump’s tariffs on Canadian goods, Prime Minister Justin Trudeau has called for national unity in response to the controversial measures. At a recent town hall event in Ottawa, Trudeau was met with cheers as he defended Canada’s trade policies and criticized the Trump administration’s decision to impose tariffs on steel and aluminum imports.
Trudeau’s remarks come as Canada prepares to retaliate with its own tariffs on American products, escalating a trade war that has strained relations between the two neighboring countries. The prime minister urged Canadians to stand together in the face of adversity and to support their government’s efforts to protect Canadian industries from unfair trade practices.
Meanwhile, Trump’s tariffs have been met with widespread criticism in Canada, with many Canadians expressing their disapproval of the measures. At a recent hockey game in Ottawa, fans booed as a video highlighting the impact of the tariffs on Canadian jobs and industries was played on the jumbotron.
As the trade dispute between the United States and Canada continues to escalate, Trudeau’s call for national unity has struck a chord with many Canadians who are concerned about the potential economic repercussions of the tariffs. With tensions running high, it remains to be seen how the two countries will navigate their increasingly strained relationship in the coming months.
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Canada’s former finance minister Chrystia Freeland has said Ottawa should retaliate to any US tariffs by adding huge levies on Tesla vehicles to punish Elon Musk, one of Donald Trump’s “billionaire buddies”.
Freeland, who is running to replace Justin Trudeau as prime minister, called for a swift, punitive reaction by Ottawa if the US president follows through on his threat to impose 25 per cent tariffs on Canada and Mexico starting this weekend.
“Canada must threaten to impose a 100 per cent tariff on all Tesla vehicles and a 100 per cent tariff on US wine, beer and spirits if unfair tariffs are imposed on Canadians,” Freeland said on Friday.
The comments from one of Canada’s most important politicians mark a sharp escalation in the trade dispute with Washington, which blew into the open after Trump said he would impose tariffs on the US’s two biggest trading partners from February 1.
The White House on Friday reiterated its plan to impose the tariffs starting on Saturday.
Trudeau also on Friday said Canada was ready to retaliate against the US: “We’re ready with a response — a purposeful, forceful but reasonable, immediate response,” he said, as he warned Canadians, “our nation could be facing difficult times in the coming days and weeks”.
Freeland, who was part of the Canadian team that negotiated the US-Mexico-Canada trade deal signed by Trump during his first presidency, said releasing a targeted list of potential retaliatory tariffs on $200bn worth of American imports would show where “we can hit Trump where it hurts”.
“By targeting products from Republican states that voted for Trump and products made by his billionaire buddies, Canada can exert unavoidable political pressure on the White House,” she said.
Canada previously imposed 100 per cent tariffs on Chinese electric vehicle imports, in a move that followed similar levies on Chinese EVs announced by Joe Biden’s administration.
Freeland’s comments also came as Mélanie Joly, Canada’s foreign minister, held last-gasp talks in Washington to try to avert Trump’s tariffs.
Joly used a Financial Times interview on Friday to warn the US that any disruption to energy flows between Canada and its southern neighbours triggered by a trade war would leave American oil refiners dependent on alternative heat oil supplies from Venezuela.
Joly also vowed Canada would never become a “colony”, in a reference to Trump’s claims that Canadians would like to join the US and his repeated goading of Trudeau, who he has called a “governor” of the “51st state”.
Canada and Mexico have drawn up lists of “tit for tat” tariffs to issue against the US as soon as Trump imposes tariffs.
Mexico’s left-wing president Claudia Sheinbaum said earlier this week that she did not think the 25 per cent tariffs would happen on Saturday, but on Friday said the government was planning for different scenarios.
“We have a plan A, plan B and a plan C, whatever the United States government decides,” she said on Friday morning.
Dan Kelly, president of the Canadian Federation of Independent Business, said a tariff war would be a huge concern for small Canadian businesses as more than half their members import goods from the US.
“Trump’s new best friend is Elon and targeting these type of people close to the president might add pressure but, overall we are urging caution with retaliatory measures,” he said.
Tiff Macklem, governor of the Bank of Canada, on Wednesday said US tariffs would likely put Canada in a recession and also raise consumer prices in the US.
The Canadian dollar and Mexican peso rose against the US dollar on Friday after reports that Trump may push back the implementation of any new tariffs to March.
Additional reporting by Christine Murray in Mexico City
In response to recent trade tensions with the United States, Canadian Minister of Foreign Affairs, Chrystia Freeland, has suggested that Canada should retaliate with tariffs on Elon Musk’s Teslas.
Freeland argues that Canada cannot stand idly by while the US imposes tariffs on Canadian goods, and that targeting Tesla, a prominent American company, would send a strong message to the Trump administration.
While some may argue that such a move could harm Canadian consumers who are interested in purchasing electric vehicles, Freeland believes that it is necessary to stand up for Canadian interests in the face of unfair trade practices.
As tensions continue to rise between the two countries, it remains to be seen whether Canada will follow through with tariffs on Teslas. But one thing is clear: Freeland is not backing down in the face of pressure from the US.
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Justin Trudeau says Canada will bring a “forceful but reasonable” retaliation to any tariffs imposed by the US as his country braces for the economic fallout of a trade war.
“I won’t sugarcoat it – our nation could be facing difficult times in the coming days and weeks,” Trudeau said on Friday while speaking to an advisory council on Canada-US relations. “I know Canadians might be anxious and worried, but I want them to know the federal government – and indeed, all orders of government – have their backs.”
The White House claimed later on Friday that goods shipped from Canada and Mexico to the US would face a 25% levy starting this weekend.
Donald Trump has said he plans to impose tariffs for three reasons. “Number one is the people that have poured into our country so horribly and so much,” he said on Thursday. “Number two are the drugs, fentanyl and everything else that have come into the country. Number three are the massive subsidies that we’re giving to Canada and to Mexico in the form of deficits.”
Officials in Ottawa and Mexico City have drawn up plans to retaliate against Washington with tariffs of their own, raising the prospect of a damaging trade war. Businesses inside the US and across the world have warned of widespread disruption if the Trump administration pushes ahead.
After his election victory last November, Trump announced on his social network that upon his return to office he would “sign all necessary documents” to impose a 25% tariff on Mexico and Canada. Mexico must stop “illegal aliens” from crossing its border with the US, he said, and Canada must halt the flow of drugs like fentanyl. “Until such time that they do, it is time for them to pay a very big price!”
Trump did not, in fact, sign these documents following his inauguration. Instead, he introduced a deadline – 1 February – by which both countries are supposed to resolve his concerns.
Claudia Sheinbaum, the Mexican president, has already taken Trump through the various migration initiatives her government has undertaken. Experts have raised questions over Trump’s demand from Canada, with so little fentanyl entering the US through its northern border that the US Drug Enforcement Administration (DEA) omitted to even mention Canada in a 2020 report. The Mexican government has sent signals it is prepared to do more on migration and fentanyl trafficking – even notching up a record seizure soon after Trump’s threats began – but it has also sought to play down the prospects of a trade war.
Canada sends 75% of all its goods and services exports to the United States, its largest trading partner and closest ally. Trudeau said the trade spat and diplomatic tangle “is not what we want”, but that if Trump followed through on his threats, “we will also act”.
A first round of retaliatory tariffs would cause minimal damage to the US, covering C$37bn of its exports to Canada, but if needed, Canada’s federal government plans to escalate by imposing tariffs on C$110bn worth of goods.
Canada’s dollar has plunged against its US counterpart and experts warned Canada’s economy could fall into a recession.
“We don’t have a lot of good historical examples where we’ve had tariff shocks of this magnitude,” Tiff Macklem, the Bank of Canada governor, told reporters earlier this week. “Exactly how quickly, how big, how people react, what the implications are for inflation – there is a certain zone of uncertainty.”
Trump’s vague demands to “secure the border” have unsettled and confused Canadian negotiators shuttling between Ottawa and Washington with increased frequency and desperation.
“The reality is that a large, uncontrolled bully is using his position as the most powerful political leader in the world, to put pressure on a whole range of allies,” said Lawrence Herman, an international trade lawyer and senior fellow at the CD Howe Institute. “We have to, in Canada and the rest of the world, recognize that we’ve entered a new era.
“With the Trump administration, there are no rules. There is no respect for international treaties or agreements. There is no longer value to the US signature on international documents.”
Mark Carney, the frontrunner to replace Trudeau, said on Friday he was “foursquare” behind all lobbying efforts by Canadian ministers in Washington.
The former governor of the Bank of Canada and Bank of England said Canada would “never back down to a bully” and that the “fever” gripping the US would eventually break.
But others remain skeptical that a full resolution is possible.
Herman, who advises governments and companies on trade issues, worries that tension between the two nations has “shattered” a shared history.
“Repairing the longstanding relationship will be very, very difficult. It will depend on goodwill on the US side and Trump has dissipated most of that goodwill,” he said. “I don’t see it returning to where it was under the previous era. It’ll be a strained and difficult and contentious relationship going forward, and Canadians have to be prepared for that.”
In Mexico, President Sheinbaum said on Wednesday: “We don’t think [the tariffs] will happen. And if they do, we have our plan.
“People are worried here, and there is a sense of uncertainty – which is what Donald Trump seeks to create,” said Kenneth Smith Ramos, Mexico’s former chief negotiator during talks over the USMCA free trade deal, struck between the US, Mexico and Canada during the first Trump administration.
“It’s a bit like a game of chicken: the two cars are hurtling towards each other at top speed,” he said. “Mexico has to send the signal that its car is not a little one but a big one that could also hurt the United States.”
Additional reporting by Thomas Graham in Mexico City
Have a question about tariffs? We’re here to help. Email callum.jones@theguardian.com and we’ll aim to answer in a future story
In response to the recent tariffs imposed by the Trump administration, Canadian Prime Minister Justin Trudeau has vowed to bring a “forceful but reasonable” retaliation. The tariffs, which target Canadian steel and aluminum exports, have been met with strong opposition from Canada.
Trudeau stated that Canada does not want to escalate the situation, but will not back down when it comes to defending its interests. He emphasized the importance of standing up for Canadian workers and businesses who will be affected by the tariffs.
The Prime Minister also noted that Canada is exploring all options, including filing a complaint with the World Trade Organization and imposing retaliatory tariffs on U.S. goods. Trudeau made it clear that Canada will not be pushed around and will respond in a manner that is firm but fair.
The escalating trade tensions between Canada and the U.S. have raised concerns about the future of the North American Free Trade Agreement (NAFTA). Trudeau has reiterated his commitment to renegotiating the agreement, but has made it clear that Canada will not be bullied into accepting unfair terms.
Overall, Trudeau’s message is clear: Canada will not sit idly by while its economy is threatened by unjust tariffs. The country is prepared to take strong action to defend its interests and protect its citizens.
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Watch: Justin Trudeau says Canada’s response to US tariffs will be ‘forceful’ and ‘immediate’
Canada will react forcefully and immediately if Donald Trump imposes tariffs, Prime Minister Justin Trudeau said on Friday.
The US president has said he could levy a 25% tariff on Canadian imports as soon as Saturday.
“It’s not what we want, but if he moves forward, we will also act,” Trudeau said.
Tariffs are a central part of Trump’s economic vision. He sees them as a way of growing the US economy, protecting jobs and raising tax revenue.
Economists suggest that such a move could have devastating immediate impacts on Canada’s economy – while also leading to higher prices for Americans.
“I won’t sugarcoat it – our nation could be facing difficult times in the coming days and weeks,” Trudeau said in his televised address to Canadians.
Canada is trying to avoid a trade war altogether. It has pledged more than C$1bn ($690m; £560m) to boost security at its shared border with the US – a key point of contention for Trump, who appears to be using tariffs as a negotiating tactic.
Trudeau said all options were still on the table – here are four of them, and their possible impacts.
1. Targeted tariffs on select US goods
Canada has already fought one tariff “war” with Trump.
During his first term, the US president slapped 10% tariffs on Canadian aluminium products and 25% tariffs on Canadian steel, citing national security concerns.
Ottawa retaliated by imposing tariffs on select goods, which were chosen to send a political message to Trump and his allies.
It put levies on Florida orange juice, and whiskey and bourbon from Tennessee and Kentucky – the latter being the home of then-Republican Senate Leader Mitch McConnell.
Both countries ended up agreeing to lift the tariffs a year later.
Senior Canadian officials recently told local media that if Trump imposed tariffs again, the immediate response would likely be targeted.
According to US government data, 17% of US exports go to Canada. More than 75% of Canada’s exports go to the US.
Canada stands to suffer a larger economic blow in any trade war with the US and this stark imbalance is why targeted tariffs are often the first and safest approach, said Peter Clark, a lawyer who previously worked on trade policy issues in Canada’s federal finance department.
By targeting select goods, Canada can hit the US without widely punishing its own citizens, as tariffs can immediately raise prices for consumers at home.
This approach is also why officials are pushing a “Buy Canadian” campaign as a way to lessen the impact of a potential retaliation.
But pundits argue that Trump is less politically vulnerable this time, given that he cannot run for a third term in the White House.
“You won’t have the same impact as last time,” said Julian Karaguesian, an economics lecturer at McGill University in Montreal and a former finance counsellor at the Canadian embassy in Washington DC.
2. Dollar-for-dollar tariffs
Another move Canada made in its first tariff war with its neighbour was to apply dollar-for-dollar tariffs.
It slapped identical tariffs on US aluminium and steel, and ensured the total dollar value of the American goods it taxed equalled the US tariffs on Canadian exports. That came up to around C$16.6bn at the time.
This time, the possible use of dollar-for-dollar tariffs could be much larger, with Canada reportedly preparing a first round on about $37bn of goods, according to official sources quoted in Canadian media.
That could be expanded to another C$110bn worth of goods.
The challenge is that Canada still does not know just how sweeping Trump’s tariffs would be. The more sweeping they are, the more goods Canada would have to tax in response.
Not all of Canada is on board with dollar-for-dollar tariffs. Scott Moe, leader of the mineral-rich province of Saskatchewan, has said that broad levies on US goods would “rip this country apart”.
Mr Karaguesian said the promised US tariffs on Canadian goods could plunge the country into a recession. If Canada responded with dollar-for-dollar tariffs, it could lead to inflation.
This would result in “stagflation,” he said, referring to a combination of high unemployment and rising prices.
Mr Clark said that whatever decision Canada took, politics would likely be top of mind. Polls suggest a majority of Canadians support retaliation, and that many Canadian business leaders want targeted, dollar-for-dollar tariffs.
Canadian politicians might be pushed to respond more forcefully if it means a boost in approval, Mr Clark said. “We’re talking about political decisions, which are not always rational.”
Watch: What Canadians think of Trump suggesting it become the 51st US state
3. The energy ‘nuclear’ option
One of the most valuable assets in Canada’s arsenal is energy.
North-eastern US states like Vermont, New York and Maine significantly rely on electricity sold to them by neighbouring Canadian provinces. British Columbia and Manitoba also supply energy to western and Midwestern regions of the US.
About 30 states receive some of their electricity from Canada, according to Canadian government data.
Canada is also the top supplier of crude oil to the US, making up 60% of total oil imports, according to the US Energy Information Administration.
Doug Ford, Ontario’s premier, has suggested that Canada cut off Americans’ supply to pinch Americans at the petrol pump.
Trump suggested on Thursday that oil and gas could be exempt from US tariffs but Canada still has the option of energy restrictions or taxes to inflict pain.
“The only thing that would really sting in the immediate to short-term is if energy prices went up, because Trump himself campaigned on bringing energy prices down very quickly,” said Mr Karaguesian.
But the move would be contentious, especially with the oil-rich province of Alberta – which has refused to sign off on taxing its oil and gas exports, arguing that doing so would disproportionately hurt its economy.
4. Pulling US booze – or not retaliating at all
Other ideas have been floated.
Ford said that Ontario could pull American-made alcohol off shop shelves in the province, signalling a different approach in which different provincial premiers could define their own responses.
Another option is not retaliating – at least for now. For weeks, Canadian officials have been meeting their American counterparts in Washington DC in a bid to stave off any American tariffs in the first place.
On Wednesday, foreign minister Melanie Joly met Secretary of State Marco Rubio to deliver a message that tariffs would be bad for both countries, and that Ottawa was addressing US concerns about border security and fentanyl trafficking.
“We need to continue to engage,” she told reporters.
Canada has also signalled that it could bring in a relief programme for businesses harmed by the possible tariffs, similar to those introduced during the Covid pandemic.
Some argue, given the economic costs of retaliation, that Canada should instead focus on diversifying its trade relationships and increasing domestic production.
“We’re a natural resource superpower,” Mr Karaguesia said, adding that the country could use the tariffs as a push to harness that potential and sell its products elsewhere.
In light of the recent tariffs imposed by the Trump administration on Canadian goods, it is crucial for Canada to develop a strategic plan to combat these unfair trade practices. Here are some ways Canada could fight back against Trump tariffs:
1. Strengthen Diplomatic Relations: Canada should continue to engage in diplomatic efforts to seek a resolution to the trade dispute. This could involve high-level meetings with U.S. officials, as well as seeking support from other countries that are also affected by the tariffs.
2. Imposition of Counter-Tariffs: Canada could consider imposing retaliatory tariffs on U.S. goods in response to Trump’s tariffs on Canadian products. This could help level the playing field and put pressure on the U.S. to reconsider their trade policies.
3. Diversification of Trade Partners: Canada should explore opportunities to diversify its trade partners and reduce its reliance on the U.S. market. This could involve negotiating new trade agreements with other countries, as well as expanding trade with existing partners in Europe and Asia.
4. Support for Affected Industries: The Canadian government could provide financial support and assistance to industries that are heavily impacted by the tariffs. This could include subsidies, loans, or other forms of assistance to help businesses weather the storm.
5. Public Awareness Campaign: Canada could launch a public awareness campaign to educate Canadians about the impact of Trump’s tariffs and rally support for efforts to combat them. This could involve media outreach, social media campaigns, and other forms of communication to raise awareness about the issue.
By taking a proactive and strategic approach to fighting Trump’s tariffs, Canada can protect its economy and ensure a fair and equitable trade relationship with the United States.
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Canada, Trump tariffs, trade dispute, economic strategy, international relations, trade negotiations, Canadian economy, import tariffs, export policies, North American trade, global trade relations.
Wall Street closed weaker Friday, pressured late in the day by comments from the White House that 25% tariffs on Mexican and Canadian goods and a 10% levy on Chinese products would begin Saturday.
A Reuters report said collection of the duties from Mexico and Canada would be delayed until March 1, but the White House denied that.
The broad S&P 500 closed down 0.5%, or 30.64 points, to 6,040.53; the blue-chip Dow dropped 0.37%, or 337.47 points, to 44,544.66; and the tech-heavy Nasdaq fell 0.28%, or 54.31 points, to 19,627.44. Even with Friday’s losses, the three major indexes ended the month ahead. The benchmark 10-year yield rose to 4.553%.
The levies are in retaliation for “the illegal fentanyl that they have sourced and allowed to distribute into our country,” Karoline Leavitt, White House press secretary, said.
The WSJ said some officials are looking for a last-minute deal to avoid enacting the tariffs.
On Monday, stocks tumbled after China’s DeepSeek said it built an artificial intelligence rivaling that of OpenAI and ChatGPT but at a fraction of the cost. That threw into question the U.S. mega spending to build AI models and prompted the White House to consider limiting Nvidia’s chip sales to China. Nvidia Chief Executive Jensen Huang is expected to meet President Donald Trump on Friday to discuss AI policy.
Stocks bounced back a bit around mid-week after Microsoft and Facebook parent Meta reiterated their AI spending goals, quelling fears companies would pull back AI dollars.
Next week, Google-parent Alphabet and online retail giant Amazon will report earnings.
Gold prices climb to record high
Gold prices rallied to a record high and put in their best monthly performance since August 2011 before easing back by day’s end. Gold prices have risen as investors have flocked to the yellow metal in a time of economic and global uncertainty. Investors are unsure how Trump’s tariff threats will play out.
Although 25% tariffs on Canada and Mexico and 10% levies on China are epected this weekend, no one knows yet if the tariffs will be across the board or if there will be exceptions. If it’s a blanket move, some economists say just the tariffs on Canada and Mexico could disrupt nearly $1.6 trillion in annual trade. China, Mexico and Canada in total account for just over 42% of all goods imported into the U.S., said James Knightley, chief international economist at Dutch bank ING.
Tariffs could also boost U.S. inflation, which has recently been stuck rather than dropping to the 2% level the Federal Reserve would like.
The Federal Reserve’s preferred inflation gauge, the U.S. personal consumption expenditures (PCE) price index, rose 0.3% last month after an unrevised 0.1% gain in November, in line with economists’ expectations. But core PCE, which excludes volatile food and energy sectors, remained stuck at 2.8%.
“While today’s result does not completely upend the ongoing disinflationary trend, it is yet another month of data showing that inflation remains persistently above the Fed’s 2% target,” said Lauren Saidel-Baker, economist at ITR economics. If Trump tariffs add to inflation this year, it “will limit the Fed’s ability to continue the rate-cutting cycle far into 2025. It is possible that we will even see rate hikes before the end of the year.”
But circling back to DeepSeek’s cost-efficient AI, “if AI ends up cheaper and more widely accessible, then this will be good for productivity, good for inflation and good for economic growth,” said Mark Dowding, BlueBay chief investment officer at RBC Global Asset Management. “It just isn’t good for those investors who may have chased a move in some stocks.”
Gold closed down about a half percentage point to $2,830.50 per ounce.
Company news
As investors wait to see what Trump’s policies will bring, they are focused on company news to drive stock market direction. Among the day’s biggest movers,
iPhone maker Apple said late Thursday it topped quarterly earnings estimates and reported record gross margins. Shares gave up early gains to end down 0.67%.
AbbVie shares jumped 4.7% after the drug company topped earnings estimates in the last three months of the year and gave an optimistic sales outlook for its immune-disease drugs Skyrizi and Rinvoq.
Vertex Pharmaceuticals received Food and Drug Administration approval for Journavx, the first new nonopiod pain killer in decades. Shares ended up 5.31%.
Walgreens shares slumped 10.3% for the worst day since June after the pharmacy chain halted its dividend to save money.
Oil giant Chevron missed quarterly earnings estimates, and its shares dropped 4.56%.
Bitcoin gave up some of the gains made after Fed Chairman Jerome Powell commented on crypto after the central bank’s policy meeting late Wednesday.
In response to a reporter’s question about the risk of digital assets, Powell said banks are “perfectly able to serve crypto customers as long as they understand and can manage the risks” and added that “a greater regulatory apparatus around crypto” from Congress would be “very constructive.”
On June 30th, 2021, US stocks closed lower for the day as investors reacted to the latest round of tariffs imposed by the US on Chinese goods. The Dow Jones Industrial Average fell 0.31%, the S&P 500 dropped 0.30%, and the Nasdaq Composite slid 0.06%.
Despite the day’s losses, all three major indices closed the month of June with gains. The Dow was up 2.33% for the month, the S&P 500 gained 2.23%, and the Nasdaq rose 1.17%.
The market has been volatile in recent weeks due to escalating trade tensions between the US and China. Investors are closely watching for any developments in the ongoing trade negotiations between the two countries.
Overall, the US stock market has had a strong performance in the first half of 2021, with all three major indices posting double-digit gains. However, uncertainties surrounding trade and geopolitical issues continue to weigh on investor sentiment.
As we head into the second half of the year, investors will be keeping a close eye on economic data, corporate earnings, and any further developments in the trade negotiations between the US and China.
Canada ready with ‘forceful, immediate’ response if US imposes tariffs, says Trudeau
Canada will respond immediately with a series of forceful countermeasures if Donald Trump goes ahead with a threat to impose tariffs, Canada’s prime minister Justin Trudeau said.
On Thursday, Trump repeated his threat to impose tariffs on imports from Canada and Mexico that would begin at 25% and “may or may not rise with time”.
Trudeau, in remarks to a meeting of an advisory council on Canada-US relations, said:
If the president does choose to implement any tariffs against Canada, we’re ready with a response – a purposeful, forceful but reasonable, immediate response.
“It’s not what we want, but if he moved forward, we will also act,” Trudeau added.
Key events
Senate confirms Doug Burgum as interior secretary
The Senate confirmed the former North Dakota governor Doug Burgumas interior secretary late on Thursday.
The vote was 79-18, with the majority of Senate Democrats joining every Republican in voting for Burgum.
Burgum, a billionaire former businessman, was governor of North Dakota, the third largest oil and natural gas producer in the country, between 2016 and 2024.
As interior secretary, he will manage US federal lands including national parks and wildlife refuges, as well as oversee relations with 574 federally recognized Native American tribes.
Doug Burgum in Philadelphia, Pennsylvania, in September 2024. Photograph: Evelyn Hockstein/Reuters
Anna Betts
Donald Trump has claimed that the military helicopter involved in the midair collision in Washington DC on Wednesday was flying too high at the time of the accident.
The Blackhawk helicopter was flying too high, by a lot. It was far above the 200 foot limit. That’s not really too complicated to understand, is it???
It is unusual for a president to weigh in like this, especially on social media, and suggest the cause of a collision, when officials have not yet revealed its cause and it remains under investigation by federal transportation authorities.
Authorities conduct search efforts around the wreckage site of in the Potomac River. Photograph: Alex Brandon/AP
All 64 people on the passenger plane, along with the three people in the army helicopter, died on Wednesday night after the two aircraft crashed into each other in midair close to the Reagan National airport.
The bodies of more than 40 people had been recovered from the icy Potomac River by Friday morning, where the wreckage now lies.
Venezuelan president Nicolás Maduro to meet with US envoy
Venezuela’s president Nicolás Maduro will meet with Richard Grenell, Donald Trump’s envoy for special missions, the country’s communications ministry has confirmed.
As we reported earlier, Grenell is expected to discuss deportation flights among other things during his trip to Venezuela.
Maduro delivers a speech in Caracas, Venezuela, 28 August 2024. Photograph: Fausto Torrealba/Reuters
Lauren Aratani
What is a tariff?
A tariff is a tax on imports, or foreign goods brought into the United States.
Who pays for tariffs?
This is a question that many Americans asked after the election. Trump has said foreign countries pay for tariffs, but tariffs are actually paid by American companies that import goods from abroad.
So if an American car manufacturer is importing a part from Mexico, it will have to pay a tariff on the part once it arrives in the country.
Why is Trump threatening to levy tariffs?
The US imports more goods than its exports – the trade deficit. Not all economists agree that trade deficits are bad but Trump has railed against them for years and tariffs are his preferred tool to deal with them.
Tariffs became a big deal in 2018 during Trump’s first term when he levied tariffs on some products from China and on metal imports. He also threatened to put tariffs on imports from Mexico, in retaliation for the large number of migrants who were crossing the border at the time. Trump eventually backed down from the tariffs in 2020.
In other words, this is all a bit deja vu.
The way that tariffs work, in Trump’s mind, is that high tariffs will incentivize American companies to move their manufacturing from abroad to American shores.
“All you have to do is build your plant in the United States, and you don’t have tariffs,” Trump said just a few weeks before the election.
But getting out of the complex global manufacturing ecosystems is nearly impossible for many companies. It takes years to get a factory up and running, so even if a company theoretically wanted to bolster its domestic manufacturing to avoid tariffs, Trump’s term would likely be over by the time it was ready.
Have a question about tariffs? We’re here to help. Email callum.jones@theguardian.com and we’ll answer in a future story.
Peter Navarro, Donald Trump’s senior trade and manufacturing adviser, said he did not know whether the president will impose tariffs on Canada and Mexico.
“I have no breaking news for you on that,” Navarro told CNBC on Friday. “I can’t tell you when; I can talk a little about why.”
He said “one of the big reasons we think about tariffs, and that’s the fentanyl,” adding: “The boss wants to do something about that.”
JB Pritzker, the Democratic governor of Illinois, has been blocking people who took part in the January 6 attack on the Capitol from working in state jobs, NBC reports.
In a written directive to the state’s primary hiring authority, the department of central management services, obtained by the outlet, Pritzker wrote:
These rioters attacked law enforcement officers protecting people in the Capitol, disrupted the peaceful transfer of power, and undermined bedrock principles of American democracy. Our State workforce must reflect the values of Illinois and demonstrate honesty, integrity, and loyalty to serving the taxpayers. No one who attempts to overthrow a government should serve in government.
Illinois governor JB Pritzker attends a briefing on security for the Democratic National Convention at the United States Secret Service field office in Chicago, Illinois. 25 July 2024 Photograph: Joel Angel Juarez/ZUMA Press Wire/REX/Shutterstock
Ramon Antonio Vargas
One of the US Capitol attackers pardoned by Donald Trump at the start of his second presidency has been handed a 10-year prison sentence for killing a woman in a drunk-driving crash, according to authorities.
Emily Hernandez served 30 days in federal prison after she joined the mob of Trump supporters who stormed the US Capitol on 6 January 2021 and was photographed holding the broken nameplate of Nancy Pelosi, the House speaker at the time.
She was among 1,500 people with roles in the Capitol uprising who received unconditional pardons from – or had their sentences commuted by – Trump on 20 January, but that clemency did not solve all of her legal problems.
Hernandez, 24, on Wednesday was sentenced to a decade in prison for getting into a car wreck while driving drunk on an interstate in Franklin county, Missouri, in 2022 and killing Victoria Wilson, court records first reviewed by NBC News show. Hernandez also injured Wilson’s husband, Ryan Wilson, with whom she had two sons.
Justin Trudeau, Canada’s prime minister, said his government has responded to what Donald Trump is “focused on and what is motiviating him to consider applying tariffs as early as tomorrow”.
“Our border is safe and secure,” Trudeau said at a meeting on Canada-US relations on Friday.
Right now, we’re showing the new American administration that they have a strong partner in Canada when it comes to upholding border security, all while simultaneously underscoring that we won’t back down, that if tariffs are implemented against Canada, we will respond. We won’t relent until tariffs are removed and, of course, everything is on the table.
“I won’t sugar coat it,” he added, warning that Canadians “could be facing difficult times in the coming days and weeks”.
Canada’s prime minister Justin Trudeau speaks about US-Canada relations as US President Donald Trump has promised to level new tariffs on Canada. Photograph: Cole Burston/Reuters
Canada ready with ‘forceful, immediate’ response if US imposes tariffs, says Trudeau
Canada will respond immediately with a series of forceful countermeasures if Donald Trump goes ahead with a threat to impose tariffs, Canada’s prime minister Justin Trudeau said.
On Thursday, Trump repeated his threat to impose tariffs on imports from Canada and Mexico that would begin at 25% and “may or may not rise with time”.
Trudeau, in remarks to a meeting of an advisory council on Canada-US relations, said:
If the president does choose to implement any tariffs against Canada, we’re ready with a response – a purposeful, forceful but reasonable, immediate response.
“It’s not what we want, but if he moved forward, we will also act,” Trudeau added.
Jaime Harrison, the outgoing chair of the Democratic National Committee (DNC), has said the party should have stuck with Joe Biden in the 2024 presidential election.
Harrison, in an interview with Associated Press as his leadership comes to a close, said that Kamala Harris’s shortened campaign timeline may have damaged her electoral chances.
“Had she had more runway, it would have been probably easier for her and for the campaign. We were building a race for Joe Biden,” he said.
Asked whether he believed that Democrats should have stuck with Biden, Harrison said:
That’s my normal default, is that you stick by your people … My nature is, ‘I’m on the team with you, you’re my quarterback. You got sacked a few times. But you know what? I’m going to block the hell out of the next person that’s coming at you.’ And that is not always the mentality of everybody in my party.
Jaime Harrison in 2020. Photograph: Jeff Blake/AP
The DNC is expected to elect a new chair on Saturday.
Richard Grenell, Donald Trump’s envoy for special missions, is expected to meet with Venezuela’s president, Nicolás Maduro, on Friday, CNN reports.
Grenell is expected to discuss deportation flights among other things during his trip to Venezuela, the outlet reports.
Grenell held secret talks in 2020 with one of Maduro’s closest allies, Jorge Rodríguez, who swore Maduro in for his third term in office earlier this month.
Trump’s appointment of Grenell has left some wondering if an agreement may be reached with Maduro involving the deportation of Venezuelan migrants from the US and access to Venezuela’s massive oil reserves for US companies in exchange for Washington accepting Maduro’s power grab.
Colombian president urges undocumented Colombians in the US to return ‘as soon as possible’
Colombia’s president Gustavo Petro has urged undocumented Colombians in the US to quit their jobs “immediately” and return to Colombia as soon as possible.
“Wealth is only produced by the working people,” Petro said on X. “Let’s build social wealth in Colombia.”
He added that the department of social prosperity would offer credits to returnees who enroll in its programs.
Michael Sainato
Donald Trump has been accused of launching an “attack on the rule of law” as three former heads of the top US labor watchdog criticized the unprecedented firing of a top official.
The abrupt removal of Gwynne Wilcox from the National Labor Relations Board (NLRB) leaves the agency “out of business” unless a replacement is nominated, they warned – and highlights a “real danger” to the independence of regulators and adjudicators now Trump is back in the White House.
In interviews with The Guardian, previous chairs of the NLRB described the dismissal of Wilcox as a “usurpation” of power that “reeks of discriminatory motive”.
Donald Trump’s firing of NLRB general counsel Jennifer Abruzzo, left, and chairwoman Gwynne Wilcox has effectively paralyzed the agency. Composite: AP, NLRB
The White House blamed decisions taken by Wilcox and Jennifer Abruzzo, the NLRB’s general counsel, as it fired the pair earlier this week.
The move leaves the agency’s board with only two members, short of the quorum of three required to issue significant decisions on US labor disputes. Wilcox, the first Black woman to serve on the board, has pledged to pursue “all legal avenues” to challenge her firing.
Canada ready with ‘forceful, immediate’ response if Trump imposes tariffs
As tensions continue to escalate between the United States and Canada over trade issues, Canadian officials have made it clear that they are prepared to respond with a “forceful, immediate” reaction if President Trump decides to impose tariffs on Canadian goods.
In a statement released earlier today, Canadian Prime Minister Justin Trudeau warned that any new tariffs imposed by the US would be met with swift retaliation from Canada. “We will not hesitate to take strong action to defend our interests and our economy,” Trudeau said.
The threat of new tariffs comes as the US and Canada are locked in a bitter dispute over the renegotiation of the North American Free Trade Agreement (NAFTA). President Trump has repeatedly criticized Canada for what he sees as unfair trade practices, particularly in the dairy and lumber industries.
Despite ongoing negotiations, tensions between the two countries have continued to rise in recent weeks, with Trump threatening to impose tariffs on Canadian steel and aluminum imports. Canada has responded by announcing its own retaliatory measures, including tariffs on US goods such as steel, aluminum, and agricultural products.
The escalating trade war between the US and Canada has sparked concerns among economists and business leaders, who fear that a prolonged conflict could harm both countries’ economies. Many are calling for a swift resolution to the dispute before it spirals out of control.
As the situation continues to unfold, all eyes will be on President Trump and Prime Minister Trudeau to see how they handle the growing trade tensions between their two countries. Stay tuned for further updates on this developing story.
