04:15 PM EDT, 03/26/2025 (MT Newswires) -- The Toronto Stock Exchange was down almost 180 points at the close of trade Wednesday just ahead of an expected announcement on new tariffs on the auto sector from U.S. President Donald Trump that could disrupt the industry and escalate a trade war with Canada.

The TSX closed down 178.45 points to 25,161.06. Among sectors, Base Metals, down 3.27%, and Technology, down 3.24%, posted the biggest losses. Telecoms was the sole gainer, up 0.95%.

Among individual stocks, Linamar ( LIMAF ) was up 1% despite the possibility that an auto parts supplier like it might take a big hit to profit due to U.S. tariffs. The executive chair of Linamar ( LIMAF ), Linda Hasenfratz, earlier this month said the auto industry was integrated across North America and needed a permanent reprieve from U.S. tariffs to avoid shutting down. Linamar ( LIMAF ) has employees at factories in Canada, the U.S., and Mexico.

According to Bloomberg News, today's U.S. tariffs are poised to apply to finished vehicles but not auto parts, according to people familiar with the matter, who cautioned that the president's plans remained fluid ahead of the announcement.

Bloomberg noted Trump told reporters earlier this week that he would detail the auto levies in the coming days, indicating they could come before his planned April 2 rollout of sweeping reciprocal tariffs targeting other nations. The president has said the levies will help spur growth in the domestic auto sector and force companies to move more production to the U.S.

Trump's move comes after Liberal Leader and current Canadian Prime Minister, Mark Carney promised measures to protect Canada's auto sector. Speaking at an election stop in Windsor, Ontario, Carney said he would establish a $2 billion fund to help make the auto industry more competitive, strengthen supply chains, protect manufacturing jobs and help workers skill up.

Trump's move also comes as Royce Mendes, Head of Macro Strategy at Desjardins Capital, noted Bank of Canada communications continue to point to a pause in interest-rate cuts in April. Echoing recent comments from BoC Governor, Tiff Macklem, Mendes noted today's 'Summary of Deliberations' from the BoC's most recent policy meeting on March 12, made clear that central bankers were torn between cutting rates another 25 basis points and maintaining the policy rate at 3% earlier this month. "Ultimately," Mendes said, "Governing Council members decided to ease monetary policy, but the hesitance to do so suggests a high degree of caution."

The 'elephant in the room' was the trade war launched by the United States, Mendes said in the same note, which was likely in preparation just as news of Trump's pending announcement broke.

Mendes noted the BoC's March decision to reduce rates was based on the belief that some additional monetary easing could help Canadians manage the uncertainty related to tariffs. But he also noted officials did not want to make too many assumptions about the path forward for monetary policy given the unpredictable trade situation. As BoC Governor Macklem said earlier this month, the uncertainty might push the central bank to the sidelines until there's greater clarity about the situation and the outlook, Mendes noted.

As a result, Desjardins remains of the view that the BoC will hold rates steady in April before returning to rate cuts later in the year. "In addition to the trade war induced drag on growth, we see challenges to the economy in the form of both mortgage renewals and slower population growth becoming more pronounced, " Mendes said.

Of commodities today, gold edged down from a record high mid-afternoon, staying well above the US$3,000 mark on safe-haven demand amid international tensions and inflationary U.S. tariff policies. Gold for June delivery was down $1.00 to US$3,053.30 per ounce after closing at a record on Tuesday.

But West Texas Intermediate crude oil rose after a report showed U.S. inventories fell more than expected last week, while concerns over supply strained by U.S. sanctions on Iran and Venezuela are also supporting the commodity. WTI for May delivery closed up $0.63 to US$69.63 per barrel, while May Brent crude was up $0.61 to US$73.63.