The stock market decline due to tariffs ignites a worldwide trade conflict. Canadian Prime Minister Mark Carney announced that Canada will impose a 25% counter-tariff on vehicles imported from the United States that do not adhere to the United States-Mexico-Canada Agreement (USMCA). This decision comes in retaliation for the US tariffs on Canadian vehicles and auto parts that took effect today.
The Business Impact of Tariffs and Stock Market
Carney stated, “The global trade framework centered around the United States, which Canada has depended on since the conclusion of the Second World War, is no longer viable. Although this system was not without its flaws, it has contributed to our nation’s prosperity for many years. He further noted that Canada’s response will “not impact vehicle content sourced from Mexico,” emphasizing that the prime minister is adhering to the existing free trade agreements. The Stock market will also be affected.
Five of the most affected businesses globally due to the tariff
Automobile Manufacturers (Global)
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Impact: The automotive industry was hit hard by Trump’s tariffs, particularly the 25% tariffs on steel and aluminum imports, as well as potential tariffs on foreign-made vehicles.
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Affected Companies:
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General Motors (USA): Faced higher costs for raw materials and components.
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Toyota and Volkswagen (Japan and Germany): U.S.-based production for these global automakers faced challenges with supply chain costs and export tariffs.
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Tech Companies (Especially in China and the U.S.)
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Impact: Trump’s tariffs on Chinese goods, including technology products, impacted companies relying on Chinese manufacturing and the global supply chain.
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Affected Companies:
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Apple (USA): Faced potential higher costs on Chinese-made products, especially iPhones, though it benefited from some tariff exemptions.
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Huawei (China): Hit by U.S. tariffs and export restrictions, especially on its ability to source critical components from U.S. companies.
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Agricultural Producers (USA, China, EU)
- The imposition of U.S. tariffs on China prompted retaliatory measures, particularly affecting agricultural goods such as soybeans, pork, and various crops, which resulted in considerable financial pressure on American farmers.
- Affected Industries: Soybean Producers (USA): The U.S. soybean sector has been significantly impacted by Chinese tariffs. Pork Manufacturers (USA): The imposition of tariffs has resulted in decreased exports, particularly to China, adversely affecting major firms such as Smithfield Foods.
Steel and Aluminum Producers (Global)
- The effect of Trump’s tariffs on steel and aluminum imports aimed to safeguard American manufacturers; however, they resulted in increased costs on a global scale.
- Affected Companies: ArcelorMittal (Global): As one of the leading steel manufacturers worldwide, this company encountered a shifting market landscape due to rising prices. U.S. Steel (USA): Although they initially gained from the tariffs, they subsequently encountered difficulties in adapting to the variable conditions of global trade.
Retailers (Global)
- Retailers experienced considerable effects due to the tariffs imposed on Chinese imports, leading to a rise in the prices of common consumer products, including electronics, clothing, and furniture.
- Affected Companies: Walmart (USA): The rise in prices for imported products from China has negatively impacted profit margins. Target (USA): The escalating costs of items, particularly in the electronics and home goods sectors, have adversely affected retailers that depend on budget-friendly imports.