12:13 PM EST, 03/06/2025 (MT Newswires) -- The Toronto Stock Exchange is down 227 points at midday, as tariffs confusion continues, after having closed up near 300 points on Wednesday.

Oil traded up from a six-month low early on Thursday despite rising supply, higher U.S inventories and the threat of weakening demand amid trade wars launched by the United States.

But gold prices eased after three days of gains even as the U.S. dollar continued to falter. Also, natural gas fell off the highest level in more than two years ahead of the release of fresh storage data.

Trade issues continue to dominate the market focus. Veteran market watcher David Rosenberg published a note entitled 'Making Global Trade Wars Great Again' in which he noted: for Canada, the tariffs are a major contractionary shock that will lead to aggressive Bank of Canada rates easing, an elongated bull market in bonds, and a move to record lows in the loonie.

In an Executive Summary, Rosenberg said: "President Trump wasn't bluffing after all and is going ahead with his steep tariffs against Canada and the United States. The implications will be far-reaching, and there will be no winners. The auto sector now faces the abyss, and the multiplier impacts on the rest of the economy should not be underestimated. He added: "Investors should recognize that the TSX is not the same as GDP, and that there will be places in the stock market to hide."

Rosenberg ended the note saying: So, plan for a 62.5 cent (U.S.) Canadian dollar, a 1.5% policy rate, and a 2.5% yield on the 10-year GoC bond as the fallout from any 25% Trump-induced tariff on America's so-called 'friend' north of the border. And focus your TSX exposure on the "bonds in drag" (Banks, REITs, Communication Services, and Utilities) and the beneficiaries of a weaker dollar (Travel/Tourism) and avoid the areas that are the most affected by the Trump trade action (Industrials, Materials, and consumer products).

Separately, Rosenberg Research noted there was a "marked deterioration in the macro tone" of the Beige Book yesterday, punctuated by evidence of inflation pressure. "Tariffs and uncertainty took center stage," the research said.

In some of the latest news on the tariffs saga, U.S. Commerce Secretary Lutnick reportedly said on U.S. TV that all USMCA-compliant trade from Canada and Mexico will be tariff exempt for a month, noted Canada's CBC TV. But CBC TV also pointed out it was unclear what industries that will include.

Canada also released its latest trade data today. CIBC noted "tariff front-running" continued to boost exports in January, as Canada's trade surplus rose sharply to $4 billion. That's the highest surplus seen since mid-2022, and was well above the consensus expectation of $1.3 billion. CIBC noted there was no material market reaction to the data, as the better than expected surplus is "simply a pulling forward of demand and not a sign of what's to come."

CIBC said: "February could have seen more pulling forward of demand boosting exports, as tariffs were delayed for only thirty days at that point. Autos that comply with the USMCA are now exempt from tariffs for one more month, but the lingering uncertainty is clearly a negative for business investment in Canada and total exports will drop sharply ahead. That keeps the Bank of Canada on a cutting trajectory, as we expect the unemployment rate will rise to a little over 7% in the coming months."