Asian shares are mixed as Trump's tariff deadline looms, while US stocks set records
Japan's Nikkei 225 fell 0.6% to 39,762.20 after earlier gains, while South Korea's KOSPI index was down 1.2% to 3,078.31.
Hong Kong's Hang Seng index lost 0.6% to 23,914.44 while the Shanghai Composite index added 0.4% to 3,475.24. Australia's S&P/ASX 200 rose 0.1% to 8,609.50. India's Sensex index was up 0.1% to 83,288.73.
'Asian markets slipped into Friday like someone entering a dark alley with one eye over their shoulder — because while US equities danced higher on a sweet spotted post-payroll sugar rush, the mood in Asia was far less celebratory. The reason? That familiar, twitchy unease every time Trump gets near the tariff trigger,' Stephen Innes, managing partner at SPI Asset Management, wrote in a commentary.
On Thursday, after a report showed a U.S. job market stronger than Wall Street expected, the S&P 500 rose 0.8% and set an all-time high for the fourth time in five days. The Dow Jones Industrial Average added 344 points, or 0.8%, and the Nasdaq composite gained 1%.
Many of Trump's stiff proposed taxes on imports are currently on pause, but they're scheduled to kick in next week unless Trump reaches deals with other countries to lower them.
In other dealings on Friday, U.S. benchmark crude was down 19 cents to $68.81 per barrel. Brent crude, the international standard, shed 30 cents to $68.50 per barrel.
The U.S. dollar slid to 144.48 Japanese yen from 144.92 yen. The euro edged higher to $1.1771 from $1.1761.
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AP Business Writer Stan Choe contributed.
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Globe and Mail
an hour ago
- Globe and Mail
Global markets' 90-day tariff pause rollercoaster nears an uncertain end
The deadline U.S. President Donald Trump set for major trading partners to strike deals with Washington or face hefty tariffs expires next week, bringing to a close 90 days of volatility but leaving global investors in the dark over what will happen next. Mr. Trump's propensity to issue a threat, or impose a new tariff, only to reverse course shortly afterwards has led to turmoil over the past three months. Investors, however, have now become somewhat inured to this sort of policymaking on the fly. And, as a result, there is little evidence at this point that many are preparing for fireworks on July 9. Instead, most expect some kind of delay, pause or compromise. What that will look like, however, is anyone's guess. Here is a snapshot of where major markets are now, relative to where they were when Mr. Trump dropped his initial tariffs bombshell on April 2: Global stock markets have staged a strong recovery following the intense volatility triggered by Mr. Trump's tariff announcement. The MSCI World index, which fell 10 per cent between April 2 and April 9, the day Mr. Trump paused the tariffs, has hit successive record highs and gained over 11 per cent since the original 'Liberation Day' announcement. Global equities got another boost in May, when the U.S. and China reached a temporary truce, pausing many tariffs for another 90 days. Geopolitical tensions, including Israel's recent strikes on Iran and Washington's subsequent bombing of Iranian nuclear sites, briefly reined in sentiment but have not derailed the broader rally. The S&P 500, which had lagged other major equity markets earlier in the year, has closed those gaps, gaining over 10 per cent since April 2, and is neck and neck with the MSCI all-country index, which excludes the United States . There's an important caveat, however. The S&P has only hit record highs in dollar terms. The weakness in the U.S. currency has eroded the returns for overseas investors. In euro or Swiss franc terms, for example, the index is still about 10 per cent below February's record high, while in pounds, it's 7 per cent below the sterling-denominated peak. The U.S. dollar, widely regarded as the world's most powerful and stable currency, has suffered a knock to its reputation from Mr. Trump's tariffs and the subsequent 90-day pause. The dollar index, which reflects the U.S. currency's performance against a basket of six others including the euro and the Japanese yen, suffered its worst first half of the year since 1973, declining by approximately 11 per cent. It has fallen by 6.6 per cent since April 2 alone. Against the currencies of some of the United States' biggest trading partners, the decline has been even more marked. It has lost some 8 per cent against the euro and the Mexican peso since then and 5 per cent against the Canadian dollar. Vincent Mortier, the CIO of Europe's largest asset manager Amundi, said the euro has plenty more room to run, especially as U.S. debt worries are also driving the dollar down. 'I won't be surprised if by the end of next year we start to revisit the $1.30 level,' he said, highlighting that at its 2008 peak, the euro got as high as $1.60. European shares have more than recovered losses suffered since Trump's 'Liberation Day'. But strength in the euro and anxiety over tariffs have kept them below March's record highs. Large exporting sectors such as pharma and autos, which make up around one-third of EU exports to the United States, have rebounded too, but have been more volatile. Brussels is reportedly open to a U.S. deal that would apply a universal 10-per-cent tariff on many of its exports, something several investors would view favourably should it be confirmed. Citi said markets risk being caught offside if tariffs are reimposed at 20 per cent or reach 50 per cent. 'Trump is truly unpredictable, but if it's really around 10 per cent, I think the markets will react very well,' said Carlo Franchini, head of institutional clients at Banca Ifigest. The impact of the trade talks extends beyond Europe, however, with automakers in Japan also being watched. Citi's base case is for a sustained 25-per-cent tariff, while a surprise cut to 10 per cent could unlock a 50-per-cent upside for Japanese auto stocks. Gold has featured as the hedge of choice against an array of risks, from tariff-induced inflation, to geopolitical risk and a shift away from the U.S. dollar. The price has hit record after record, rising 26 per cent so far this year to around US$3,330 an ounce. Gold has eclipsed bitcoin , which has gained about 14 per cent year to date, and even Nvidia , the maker of chips that power AI capabilities, whose shares went parabolic last year and have risen about 18 per cent this year. Since April 2, gold's ascent has gathered pace, fuelled by purchases from central banks, fund managers and even individuals. A survey by UBS Asset Management this week showed 39 per cent of respondents said they planned to increase their gold holdings, compared with 15% last year. The independence of the Federal Reserve - whose chair, Jerome Powell, Mr. Trump has berated repeatedly for not cutting interest rates fast enough - is one of the key concerns cited in the survey. Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.
Toronto Star
an hour ago
- Toronto Star
What if killing Canada's digital tax is just the beginning for Donald Trump?
Prime Minister Mark Carney, left, listens to U.S. President Donald Trump while posing for a photograph during the G7 Summit in Kananaskis, Alta. on June 16, 2025. DARRYL DYCK THE CANADIAN PRESS Flash forward to last week. There was Trump, posting on social media that Canada's incoming Digital Services Tax — a policy that would force American tech giants and other firms, including Canadian ones, to pay up — was nothing short of a 'blatant attack' on the United States. Trump declared he had cut off all negotiations to resolve the trade war that started earlier this year with his wave of tariffs on Canadian goods. In other words, Canada's most important commercial and military partner, the destination for 76 per cent of all exports last year, was willing to ditch talks and dictate terms that could jeopardize thousands of jobs and hundreds of billions of dollars in economic activity. All over a domestic policy the Americans didn't like. Barely 48 hours later, shortly before midnight on a Sunday, the government announced the tax was dead. Not only would Canada not implement the policy as planned, it would repeal the 2024 law that created it. Is this Trump using economic pressure to force Canada's hand? 'It is exactly that,' said Lawrence Herman, a veteran trade lawyer and special counsel with the firm, Cassidy Levy Kent. 'It's an example of, on a particular issue, how much pressure can be brought to bear to force Canada to abandon not only a policy, but a law that has been in force for 18 months.' In Herman's view, the decision looks like a 'significant retreat' by the government, which shows 'how dependent we are on a reasonable relationship' with Canada's largest trading partner. Other policies that Trump has complained about, such as the supply management system for dairy and poultry, could be next, he said. Pete Hoekstra, the U.S. ambassador to Canada, told the CBC this week that he has a 'strong belief' Canada could water down that system by changing a law designed to protect it if that becomes part of a new trade deal. 'It's not a particularly good start to this so-called new economic and security relationship,' Herman said. He was referring to Carney's stated goal of talks that are now continuing under an agreement struck at the Group of 7 summit in the Alberta Rockies last month to strive for a deal to redefine the relationship by July 21. Others have been harsher in their judgment. Lloyd Axworthy, a former Liberal foreign affairs minister, posted online that Carney was acquiescing to Trump in a way that contradicts his 'elbows up' mantra on the campaign trail. 'Forget any dreams of a more sovereign, self-directed Canada. We're doubling down on the corporate cosiness and U.S. dependency that's defined our last half-century,' he wrote on Substack. Axworthy did not respond to an interview request Thursday. For Jean Charest, a former Quebec premier who sits on the government's Canada-U.S. advisory council, the situation illustrates the 'chaos' of dealing with Trump, whose administration is grappling with trade talks and tariffs threats against most countries on the planet. This meant that Carney's government was operating 'in a world of very bad choices,' Charest said. Deciding to scrap the Digital Services Tax, in that context, was 'certainly a legitimate choice,' he said. 'We are not in an ordinary world of negotiations,' Charest added. 'It would be nice to think, 'You give, I give ... we compromise.' It doesn't work that way with Donald Trump, and we're making our way through this by trying to protect essentially what's the most important for us in the short term, and that's a negotiation that has some legs.' Charest noted that there was opposition inside Canada to the Digital Services Tax, which would have applied back to 2022 with a three per cent tax on Canadian revenues from digital services companies with more than $1.1 billion in global earnings and $20 million inside Canada. The U.S. also pushed back against the policy when Joe Biden was in power. David Pierce, vice-president of government relations with the Canadian Chamber of Commerce, said his business lobby group felt the Digital Services Tax should be paused. He also said it would have been wrong to proceed with it after the U.S. dropped a controversial provision from Trump's major budget bill last week: the so-called 'revenge tax' that would have hit the U.S. assets of foreign businesses and individuals. That decision came as the G7 agreed to exempt American firms from a co-ordinated effort to ensure corporations pay a minimum tax, which was 'absolutely a win' for the U.S. Even so, Pierce said Canada likely had no choice but to drop the policy, given Trump's exploitation of Canada's 'weakness' — its major economic reliance on trade with the U.S. 'We just hope that this now paves the way for a good renewed deal,' said Pierce. The ultimate goal of the federal government in that deal, at least publicly, has been to return to the terms of the Canada-United States-Mexico Agreement (CUSMA), which Trump signed in 2018 during his first term, after disparaging North American free trade as unfair to his country. That would mean lifting the rounds of tariffs Trump has imposed since the winter, with import duties tied to concerns about drugs and migration over the border, and others that Trump slapped on Canadian autos, steel and aluminum in a bid to promote those sectors in the U.S. Canada has responded with countertariffs on its own that the government says hit more than $80 billion worth of American imports to Canada. Canada's lead trade negotiator with the Trump administration, Ambassador Kirsten Hillman, was not available for an interview this week, the embassy in Washington told the Star. Charest, however, said he believes it is possible that Canada could accept some level of tariffs in a July 21 deal, so long as they have no material effect. Such 'zero-effect' tariffs could only kick in at levels of trade that Canada doesn't or likely won't achieve, for example.
Toronto Sun
an hour ago
- Toronto Sun
Trump plans to start notifying countries of U.S. tariffs up to 70%
Published Jul 04, 2025 • 4 minute read Donald Trump speaks to reporters at Joint Base Andrews in Maryland on July 3. Photo by Andrew Caballero-Reynolds / Photographer: Andrew Caballero-R (Bloomberg) — U.S. President Donald Trump said his administration will probably start notifying trading partners Friday of the new U.S. tariff on their exports effective Aug. 1, while reiterating a preference for simplicity over complicated negotiations five days before his deadline for deals. This advertisement has not loaded yet, but your article continues below. THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. SUBSCRIBE TO UNLOCK MORE ARTICLES Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. REGISTER / SIGN IN TO UNLOCK MORE ARTICLES Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account. Share your thoughts and join the conversation in the comments. Enjoy additional articles per month. Get email updates from your favourite authors. THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK. Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account Share your thoughts and join the conversation in the comments Enjoy additional articles per month Get email updates from your favourite authors Don't have an account? Create Account Trump told reporters that about '10 or 12' letters would go out Friday, with additional letters coming 'over the next few days.' 'By the ninth they'll be fully covered,' Trump added, referring to a July 9 deadline he initially set for countries to reach deals with the U.S. to avoid higher import duties he has threatened. 'They'll range in value from maybe 60 or 70% tariffs to 10 and 20% tariffs,' he added. US talks with economies from Indonesia and South Korea to the European Union and Switzerland are reaching critical stages, where the most contentious issues are hammered out. Trump's latest threat, which fits his pattern of issuing ultimatums to break any impasses, aligns with earlier statements that some nations won't have a say in their tariff level. Your noon-hour look at what's happening in Toronto and beyond. By signing up you consent to receive the above newsletter from Postmedia Network Inc. Please try again This advertisement has not loaded yet, but your article continues below. The top tier of his new tariff range, if formalized, would be higher than any of the levies the president initially outlined during his 'Liberation Day' rollout in early April. Those varied from a 10% baseline tariff on most economies up to a maximum of 50%. Trump didn't elaborate on which countries would get the tariffs or whether that meant certain goods would be taxed at a higher rate than others. Trump said that countries would 'start to pay on Aug. 1. The money will start going to come into the United States on August 1.' Tariffs are typically paid by the importer, or an intermediary acting on the importer's behalf. But often it's profit margins or the end consumer that ultimately absorb much of the cost. Stocks in Asia and Europe dropped along with the dollar. US equity and Treasury markets closed for the Fourth of July holiday. This advertisement has not loaded yet, but your article continues below. The lagged effect of tariffs on inflation has some Federal Reserve officials wary of cutting interest rates. The Fed has held off on lowering rates this year — despite intense pressure from Trump — in part to determine whether tariff-driven price hikes might evolve into more persistent cost-of-living pressures. Trump has long threatened that if countries fail to reach deals with the U.S. before next week's deadline, he would simply impose rates on them, raising the stakes for trading partners that have rushed to secure agreements with his administration. He initially announced his higher so-called 'reciprocal' tariffs on April 2, but paused those for 90 days to allow countries time to negotiate, putting in place a 10% rate during that interval. This advertisement has not loaded yet, but your article continues below. Bloomberg Economics estimates that if all reciprocal tariffs are raised to their threatened level on July 9, average duties on all US imports could climb to around 20% from close to 3% before Trump's inauguration in January. That would add to growth and inflation risks for the US economy. So far, the Trump administration has announced deals with the UK and Vietnam and agreed to truces with China that saw the world's two largest economies ease tit-for-tat tariffs and lower export controls. Asked Thursday if more deals were on the way, Trump responded that 'we have a couple of other deals, but you know, my inclination is to send a letter out and say what tariffs they are going to be paying.' 'It's much easier,' he said. 'I'd rather just do a simple deal where you can maintain it and control it.' This advertisement has not loaded yet, but your article continues below. Trump announced the Vietnam deal on Wednesday, saying that the US would place a 20% tariff on Vietnamese exports to the US and a 40% rate on goods deemed transshipped through the nation — a reference to the practice whereby components from China and possibly other nations are routed through third countries on their way to the US. Vietnam deal While the rates are lower than the 46% duty Trump imposed on Vietnam initially, they are higher than the universal 10% level. And many of the particulars of the deal are still unclear, with the White House yet to release a term sheet or publish any proclamation codifying the agreement. After Trump's announcement, Vietnam said the negotiations were still ongoing. Indonesia is confident it is close to securing a 'bold' trade deal with the U.S. that will span critical minerals, energy, defence cooperation and market access ahead of the looming tariff deadline, according to the nation's chief negotiator on Friday. This advertisement has not loaded yet, but your article continues below. Many major trading partners, however, such as Japan, South Korea and the European Union, are still working to finalize their accords. South Korea's top trade official will visit the US this weekend with fresh proposals in a last-minute bid for a reprieve before higher tariffs are scheduled to kick in. The U.S. president has expressed optimism about reaching an agreement with India but has spoken harshly about the prospects of an accord with Japan, casting Tokyo as a difficult negotiating partner. He intensified his criticism this week, saying that Japan should be forced to 'pay 30%, 35% or whatever the number is that we determine.' Trump on Tuesday also said he was not considering delaying next week's deadline. Asked about any potential extension of talks, US Treasury Secretary Scott Bessent said earlier Thursday that Trump would make the final call. 'We're going to do what the president wants, and he'll be the one to determine whether they're negotiating in good faith,' Bessent said on CNBC when asked whether the deadline might be lengthened. — With assistance from Catherine Lucey, Ben Holland, Ben Otto, Soo-Hyang Choi and Meghashyam Mali. World Toronto & GTA Toronto & GTA Editorial Cartoons Toronto Maple Leafs
