09:41 AM EST, 02/10/2025 (MT Newswires) -- So far Monday, markets are taking another belligerent move by United States President Donald Trump relatively well, said Scotiabank.

Sovereign yields are little changed but with a roughly 5bps decline in Canadian yields from 2s through 10s outperforming other global benchmarks. Equities are broadly higher by roughly 0.25% to 0.5% across exchanges, noted the bank. The US dollar is mixed but both the Canadian dollar (CAD or loonie) and Mexico's peso are slightly depreciating with CAD the weakest performer among major crosses largely because it is the biggest exporter of the targeted metals to the U.S.

There is nothing else material by way of developments across global markets to start the week, pointed out Scotiabank.

Trump said on Sunday that he would announce 25% tariffs on all imports of steel and aluminum on Monday. The bank is watching for an executive order to be issued at around 1 p.m. ET. Then it will watch for the retaliation announcements as in 2018.

Canada is the number one source of U.S. steel imports but only barely above the European Union taken as a whole. Canada is by far the number one source of U.S. aluminum imports.

Canadian exports of steel and aluminum to the U.S. equaled 5.8% of all Canadian exports to the U.S. including 1.8% in iron and steel, 1.4% in articles of iron and steel, and 2.7% of alumina and aluminum products.

Canadian imports of U.S. iron and steel and aluminum equal about 4.6% of all imports from the U.S. broken down as 1.56% iron and steel, 1.95% articles of iron and steel, and 1.09% alumina and aluminum processing.

The pass-through incidence effects of tariffs are likely to work through every product from autos to appliances as just two examples, stated Scotiabank. For example, the U.S. producer price index for iron and steel surged by about 17% after the 2018 25% tariffs, though that was child's play compared with the supply chain disruptions in the pandemic.

Trump also pledged to announce reciprocal tariffs on any country that imposes tariffs on the U.S. and to do so in separate orders over the next couple of days or so. The U.S. already has an average tariff rate of 3.5% on all imports including 4.8% on agricultural imports and 3.2%.

Canada's is higher, added the bank. The U.S., however, also uses other tactics beyond tariffs, like constant trade harassment and refusal to abide by agreements and rulings on commodities like Canadian lumber exports where it steadily loses arbitration panel decisions.

The U.S. employs heavy use of subsidies across multiple industries such that its protections extend far beyond tariffs, according to Scotiabank. The U.S. frequently doesn't honor its agreements as the bank has seen in the steel and aluminum tariffs of 2018, NAFTA tensions, the latest round of metals tariffs and Trump's constant threats to impose draconian tariffs that far swap any average tariff rates imposed by others.