Investment update

Weekly insight into the marketplace.

March 31 to April 4, 2025

U.S. tariffs drove a world-wide sell-off

On Thursday and Friday, stock markets had their worst two-day loss in value since March 2020, when COVID sent the financial world into a tailspin. The TSX, the Dow and the S&P 500 all declined more than 10% to enter a correction, while the Nasdaq fell into bear market territory (down 20% from its recent peak). U.S. stocks lost a combined US$6.4 trillion in market value as investors grappled with the possibility of stalled economic growth and a return of rising inflation. The megacap tech stocks that propelled markets to record highs in recent years suffered some of the steepest losses. Apple, which manufactures about 85% of its iPhones in China, had its worst one-day performance in five years on Thursday, falling 9.2%. Amazon and Meta also sank around 9%, while shares of Nvidia dropped 8%. Canadian tech was not immune, with Shopify shedding close to 20%. Retail and apparel companies in both Canada and the U.S. also took a big hit Thursday. Canada’s Aritzia saw its shares plummet 20% (the biggest decline on the TSX) and Lululemon was down 9.6%. In the states, Nike and Ralph declined 14.4% and 16.3%, respectively. Losses on Friday followed China’s retaliatory measures against the U.S. that included 34% tariffs on all U.S. goods, as the trade war between the world’s two biggest economies intensified.

Trump unveiled “Liberation Day” tariffs

Prior to April 2, U.S. President Donald Trump’s main targets were expected to be his top trade partners: Canada, Mexico, the European Union and China. In a White House Rose Garden announcement on Wednesday, the 47th U.S. President unveiled a much more expansive plan, signing an executive order that imposed tariffs on more than 180 countries, starting at a baseline of 10%. The order, which Trump said is “our declaration of economic independence,” shook global markets as fear grew over international trade system disruptions and how the tariffs will impact world economies. Asian countries were some of the hardest hit by the U.S tariffs. In addition to the cumulative 54% on Chinese imports, Cambodia received a 49% tariff, Vietnam 46%, India 26%, South Korea 25% and Japan 24%. Taiwan was hit with 32% tariff, but its semiconductor industry, which produces the world's most advanced chip technology, was exempt. Canada and Mexico avoided new measures, but the existing 25% tariffs on foreign-made automobiles and 25% on Canadian steel and aluminium, remain in place. Products compliant with the U.S.-Mexico-Canada Agreement are exempt, but there are still tariffs of up to 25% on non-compliant goods. Overall, the executive order raises the average U.S. tariff rate on imports from last year’s 2.5% to the current 22%.

World leaders reacted to the U.S. tariffs

The reactions to Trump’s sanctions were swift and varied. Here’s what some world leaders said in the immediate aftermath:

Canadian Prime Minister Mark Carney: “The series of measures will directly affect millions of Canadians. We are going to fight the tariffs with countermeasures. We are going to protect our workers, and we are going to build the strongest economy in the G7. In a crisis, it is important to come together, and it is essential to act with purpose and force.”

European Commission chief Ursula von der Leyen: “We are prepared to respond. We are now preparing for further countermeasures to protect our interests and our businesses if negotiations fail. It is not too late to address concerns through negotiations. Let’s move from confrontation to negotiation.”

China Commerce Ministry: "China firmly opposes this and will take countermeasures to safeguard its own rights and interests. There are no winners in trade wars, and there is no way out for protectionism. China urges the U.S. to immediately lift unilateral tariffs and properly resolve differences with its trading partners through dialogue on an equal footing."

UK Prime Minister Keir Starmer: “Nobody wins in a trade war. That is not in our national interest. We have a fair and balanced trade relationship with the U.S. Negotiations on an economic prosperity deal, one that strengthens our existing trading relationship - they continue. Nonetheless... I will only strike a deal if it is in the national interest."

Australian Prime Minister Anthony Albanese: "The (Trump) administration's tariffs have no basis in logic and they go against the basis of our two nations' partnership. This is not the act of a friend. Today's decision will add to uncertainty in the global economy, and it will push up costs for American households."

Japan Prime Minister Shigeru Ishiba: "The U.S. government's broad trade restrictions will have a significant impact not only on the economic relationship between Japan and the U.S., but also on the global economy and the multilateral trading system as a whole. We have serious concerns about the consistency of these measures with the WTO Agreement and the Japan-U.S. Trade Agreement."