A widely followed gauge of mining stocks plunged by more than 4% as worldwide markets sank a day after United States President Donald Trump imposed global reciprocal tariffs.
The S&P/TSX Global Mining Index on the Toronto exchange, which holds 98 mining companies ranging in size from BHP (NYSE, LSE, ASX: BHP) to enCore Energy (TSXV: EU; Nasdaq: EU), fell 4.5% to close at 123.3 points on Thursday.
The Dow Jones Industrial Average fell 1,679.39 points or 4% to close at 40,545.93, while the S&P 500 Index dropped 274.45 points or 4.8% to end the trading day at 5,396.52 points. Gold hit a record of $3,167.57 per oz. early on Thursday before easing to $3,073.50 per ounce.
On Wednesday afternoon, Trump followed through on his long-promised “liberation day” of reciprocal tariffs with a 10% base duty on almost all countries to as high as 49% for Cambodia, with China at 34% (in addition to existing 20% levies for a total of 54%) and the European Union at 20%.
Canada and Mexico were spared new duties seemingly because of the Canada-U.S.-Mexico (Cusma) trade agreement but they still face 25% tariffs on auto manufacturing, aluminum and steel announced earlier. Ottawa had already responded with tariffs on U.S. aluminum and steel. Canadian Prime Minister Mark Carney said Thursday Canada would impose 25% tariffs on auto imports from the U.S. that aren’t compliant with Cusma.
Post-war system ‘over’
“Yesterday’s actions by the U.S. administration, while not specifically targeting Canada, will rupture the global economy and adversely affect global economic growth,” Carney said in Ottawa. “The system of global trade anchored on the United States that Canada has relied on since the end of the Second World War, a system that, while not perfect, has helped to deliver prosperity for our country for decades, is over.”
Carney is bidding to win a first term as prime minister in the April 28 election after last month replacing former PM Justin Trudeau as head of the Liberal Party. His main challenger is Conservative party leader Pierre Poilievre, who headed the official opposition when the election was called.
Support for the Liberals recently stood at 43.4% compared with 37.6% for the Conservatives, according to an average of national opinion polls compiled by the CBC Poll Tracker. Poilievre, who has said it’s important for Canada to have one voice on the national issue, nevertheless criticized Carney at a campaign stop Thursday.
“Just last Friday, Mark Carney said he had a quote very productive, very constructive call with President Trump, citing progress,” Poilievre said. “Unfortunately, Canada has not been spared. There is no progress, and there was nothing, constructive or productive about Trump’s tariff announcement.”
Exemptions
Also exempt from the new tariffs are pharmaceutical goods, copper, bullion and critical minerals not available in the U.S., BMO Capital Markets said in a note on Thursday. The duties are likely to remain until the U.S. removes them because it based them on the size of trade deficits, giving nations little negotiating room, BMO commodities analyst George Heppel wrote.
“This represents the largest shift in U.S. trade policy in a century,” he said. “Cratering U.S. imports in the second quarter will weigh heavily on spot demand for most commodities. Conversely, we expect gold to shine as investors seek a relatively safe haven and stagflation hedge, central bankers reconsider their appetite for long-term exposure of U.S. treasuries, and wider dedollarization trends potentially enter an acceleration phase.”
One of the most immediate business reactions was for Chrysler brand manufacturer Stellantis to say Thursday it’s shutting a plant in Windsor, Ont. for two weeks, affecting 3,200 workers. The assembly line makes the Pacifica minivan. Shifts are being cancelled at another factory that produces Jeeps in Toluca, Mexico, which is being halted from April 7 to 31.
“I mentioned my concern to the CEO of Stellantis and how we need to have this [Windsor] plant up and going,” Ontario Premier Doug Ford said Thursday. “I’ve been saying this over and over again, a tariff on Canada is a tax on Americans.”
Ford described Trump’s liberation day as termination day.
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