By John Meyer, consultant in financial affairs – Eurasia Business News, July 11, 2025. Article no. 1613

Stock index futures have dropped sharply following President Donald Trump’s announcement of a 35% tariff on Canadian goods, set to take effect August 1, 2025. The move marks a significant escalation in U.S.-Canada trade tensions, raising the tariff rate from the previous 25% and threatening a critical trading relationship—Canada exports about 75% of its goods to the U.S., with key industries like autos and metals particularly exposed.

Trump’s announcement comes amid stalled trade negotiations and follows Canadian retaliation with its own tariffs. The U.S. President has also linked the tariff decision to Canada’s handling of the fentanyl crisis and its digital services tax, warning that any increase in Canadian tariffs would be matched or exceeded by the U.S. While some carve-outs may remain for goods covered under the USMCA (United States-Mexico-Canada Agreement), the scope of the new tariff is broad and is separate from existing sector-specific tariffs on steel, aluminum, and vehicles.

Markets reacted negatively due to:

  • Fears of a wider trade war and retaliatory measures from Canada.
  • Disruption to cross-border supply chains, especially in key sectors.
  • Broader uncertainty as Trump also threatened 15%-20% tariffs on most other U.S. trading partners.

The tariff announcement has heightened concerns about increased costs for businesses and consumers, supply chain disruptions, and the risk of slower economic growth, all contributing to the sharp drop in stock index futures.

U.S. stock futures and European shares fell early Friday, while the greenback strengthened, including against the Canadian dollar.

Read also : Gold : Build Your Wealth and Freedom

Wall Street has largely shrugged off Trump’s recent trade salvos, with shares climbing even as countries around the world receive notices of new tariff rates. The S&P 500 hit a record high Thursday, its eighth this year.

The new tariffs would exempt, for now, goods compliant with the U.S.-Mexico-Canada Agreement.

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© Copyright 2025 – Eurasia Business News. Article no. 1613