Transatlantic Tensions: Trump's Tariff Policy Shakes Canadian Stock Markets

Shares of the Canadian aircraft manufacturer Bombardier suffered a dramatic setback of up to 13 percent on Tuesday. The reason for this lies in the announcement by the elected U.S. President Donald Trump to impose a 25 percent import tariff on imports from Canada and Mexico in the future. Bombardier recorded the largest daily loss since February and became the worst performer on the Toronto Stock Exchange. By midday, the share price was at 96.43 CAD, a decrease of nine percent compared to the previous day. Trump made it clear on Truth Social that this tariff is intended to stop the influx of drugs, particularly fentanyl, and illegal immigrants into the U.S. This tariff rate significantly surpasses the initial 10 percent that Trump campaigned with. Eric Martel, CEO of Bombardier, stated at a recent press conference that such tariffs would undoubtedly impact the company, though he did not provide details on the potential effects on production and deliveries. Particularly affected would be the Global 8000 model, whose key components are manufactured in Quebec, Texas, and Mexico. Already on Monday, before Trump's announcement, Bombardier reported the delivery of the first Global 6500 jet to the U.S. Army's High Accuracy Detection and Exploitation System program. The S&P/TSX Composite Index recorded a decline of about 0.3 percent by midday. Other industrial stocks also reacted negatively to the tariff threat. Canadian automotive suppliers, among others, lost value: Magna International fell by four percent, Linamar by five percent, and Martinrea International by six percent. The ski and watercraft manufacturer BRP also recorded a loss of six percent. In the past, Bombardier had already struggled with protectionist measures, particularly the nearly 300 percent punitive tariffs imposed in 2017 by the U.S. Department of Commerce due to alleged illegal subsidies and dumping practices.