TSX falls as US-China trade war heats up

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(Reuters) -Canada’s main stock index fell on Monday after U.S. President Donald Trump threatened China with additional 50% tariffs, intensifying the U.S.-China trade war.

Toronto Stock Exchange’s S&P/TSX composite index was down 2.4% at 22,636.34 points. The index fell more than 10% below its January 30 record close in the previous session, confirming a correction.

Trump said on Monday he would impose an extra 50% tariff on China, if it does not withdraw its retaliatory tariffs on the U.S. by April 8.

Earlier in the day, White House economic adviser Kevin Hassett said the U.S. president has talked to world leaders all weekend and will listen to proposals for great deals.

“While the (U.S.) President may have talked to world leaders, there is no quick fix. Deals take time to negotiate. Communications with China are reportedly stalled and any relief bounce is likely to be short lived,” said Michael Sprung, president at Sprung Investment Management.

Canadian firms and consumers see a sharply higher chance of recession over the coming year as Trump’s tariffs and possible retaliation fuel widespread uncertainty, the Bank of Canada said on Monday.

Canada was spared the Trump administration’s broad global tariffs on April 2 but faces tariffs on steel and aluminum exports to the U.S. as well as on autos.

On TSX, most of the sectors were trading in red, with healthcare sector leading the declines, down 4%, hitting their lowest since July 2023.

Heavyweight energy was down 2% as oil prices extended losses, falling nearly 2% amid recession fears and OPEC+’s planned supply increase.

(Reporting by Sanchayaita Roy in Bengaluru; Editing by Sahal Muhammed)