04:20 PM EST, 02/27/2025 (MT Newswires) -- The Toronto Stock Exchange was down for the first session in four on Thursday after U.S. President Donald Trump said a 25% tariff on Canadian imports into the United States and 10% on Canadian energy imports will be put into effect on Tuesday.

The S&P/TSX Composite Index closed down 200.12 points to 25,128.24, the lowest since Jan.17. Among sectors today, Base Metals and Information Technology were the biggest decliners, down 1.36% and 1.21%, respectively. Battery Metals was the biggest gainer, up 2.52%.

Tariff worries solidified Tuesday after Trump confirmed the levies are coming March 4. "This is but one front in the America first trade offensive, but arguably the most calamitous for Canada, a de facto growth killer. Canadian goods exporters can no longer take unfettered access to the U.S. for granted," said Warren Lovely, Managing Director at National Bank of Canada

But, Lovely added, there's another Canadian 'export' channel potentially at risk, based on today's balance of international payments release. Having 'exported' almost $200 billion of term debt to foreign investors in 2024 alone, over 40% of Canada's national bond stock is now held outside the country, he noted.

Lovely said: "Canada's goods trade exposure is impossible to ignore (as Trump constantly reminds us). But as explored here, Canada is likewise beholden to foreign investors (many in the U.S.) for vital debt financing lifelines. Sure, Canadian bond issuers could pivot to domestics if international investors balk. But that might soak up domestic liquidity quickly, which in turn could be a catalyst for a serious valuation re-think. As with tariffs, these financial market/valuation risks are hard to accurately pin down. They nonetheless could be increasingly top of mind (for bond investors and market strategists) if Mr. Trump follows through on the tariff threat."

It's not only Canadians that see Trump's tariffs move as a negative one. Trump is reigniting a trade war at "precisely the worst possible moment", said the chief executive of one of the world's largest independent financial advisory and asset management organizations; deVere Group boss Nigel Green.

Green said, "Just as the US economy shows signs of slowing, (Trump) is pushing forward with fresh tariffs. The consequences could be devastating. The timing is reckless. Inflation, which remains stubbornly high, will almost certainly spike as higher tariffs drive up prices for businesses and consumers.

"Mexico, Canada, and China are America's top trading partners, meaning these sweeping duties will ripple through every sector. Higher costs on essential goods, from food to electronics to cars, will further squeeze household budgets already under pressure."

But, Green added, the problem is not just inflation. Economic growth is faltering, and the weight of these tariffs will push the US into the worst scenario of all; stagflation.

Thierry Wizman, Global FX and Rates Strategist at Macquarie, said "randomization and brinkmanship are two game-theoretic strategies being used by the US to elicit concessions" from international trade partners. "By preventing opponents from exploiting predictable behavior, randomization gives a player an advantage, in a micro context," he added.

But in the macro context, Wizman said there's a risk that too much policy uncertainty ensues, and causes a recession. "But that risk, too, is exploitable through brinkmanship. By feigning that he'd allow a recession, Trump improves his advantage even more. We still think that, ultimately, it is mainly concessions -- rather than permanent tariffs -- that will ensue."

Of commodities, gold traded lower late afternoon on Thursday as the dollar moved higher on Trump's latest comments, that come a day after he said the tariffs would be delayed for a month. Gold for April delivery was last seen down $47.80 to US$2,882.80 per ounce, continuing to correct from Monday's record high of $2,963.20.

But West Texas Intermediate crude oil closed higher after Trump rescinded Chevron's (CVX) license to export Venezuelan crude oil. WTI oil for April delivery closed up $1.73 to settle at US$70.35 per barrel, rising off the lowest since Dec.10, while April Brent crude was last seen up $1.45 to US$73.98.