04:16 PM EDT, 05/12/2025 (MT Newswires) -- The Toronto Stock Exchange closed above the 25,500 level for the first time in nearly three months on Monday after China and the United States agreed to a 90-day truce in their trade war.

The S&P/TSX Composite Index closed up 177.44 points at 25,532.18, its fifth-straight gain. Among sectors, Information Technology, up 5.49%, and Base Metals, up 4.3%, led gains, while Utilities were down 0.97%, followed by Telecoms, down 0.20%.

Stock markets across North America were buoyed from the open by weekend reports the United States agreed to reduce levies on Chinese products to 30% from 145%, while China is cutting its levy on U.S. imports to 10% from 125%. as the two countries set a three-month deadline to work towards a broader agreement.

But as National Bank economists Ethan Currie and Taylor Schleich noted: lower tariffs are not to be confused with low tariffs. "And," the pair said, "even after more bilateral agreements are struck over coming weeks/months, low tariffs will still be a thing of the past as the [U.S] administration will retain a material degree of protectionism."

Another National Bank duo, Matthieu Arseneau and Kyle Dahms, in a separate note said American protectionism is taking a "significant economic toll" on Canada. They noted tariff uncertainty has "paralyzed many companies", leading to the suspension of numerous investment projects. The ripple effects, they noted, are now reaching the labor market, with private sector employment down by more than 75,000 since February. They also noted consumer confidence has plunged to an all-time low, and the housing market is "clearly feeling the strain."

Arseneau and Dahms said while the Canadian government has responded cautiously to U.S. tariff measures, public sentiment is far less restrained. Discontent with the U.S. administration is growing, and Canadians are increasingly voting with their wallets. They noted travel to the United States has collapsed; down 34% by land and 17% by air since January. They also noted one survey revealed that 71% of Canadians have cut back on purchases of American products, while 74% report buying more local goods. The National Bank duo said: "By redirecting spending toward domestic tourism and Canadian-made products, households are attempting to cushion the blow of U.S. protectionism. But such measures can only go so far. Ultimately, both countries stand to gain from restoring normal trade relations, a true win win scenario."

Also, Bloomberg noted Peter Hoekstra, the U.S. ambassador to Canada, said some U.S. tariffs on Canadian imports may remain in place even as the relationship between the two countries improves. "I'm not sure they'll be totally removed," Hoekstra said in an interview on Global TV's The West Block Sunday when asked about the 25% tariff U.S. President Donald Trump placed on most Canadian goods in March, citing concerns about fentanyl entering the United States. Bloomberg noted while less than 1% of the fentanyl seized by U.S. Customs and Border Protection comes via the U.S.-Canada border according to CBP data, there is some evidence of fentanyl production in the country.

Of commodities, gold traded sharply lower late afternoon on Monday as the dollar surged after the United States and China reached an agreement to lower tariffs on each other's exports. Gold for June delivery was last seen down $104.00 to US$3.240.00 per ounce.

But West Texas Intermediate crude oil closed higher on Monday after China and the U.S. scaled back their tariff battle following weekend talks. WTI oil for June delivery closed up $0.93 to settle at US$61.95 per barrel, while July Brent crude was last seen up $0.99 to US$64.90.