12:18 PM EST, 02/27/2025 (MT Newswires) -- The Toronto Stock Exchange is down 56 points at midday, having opened up 60 points in early trade.

Energy, up 1%, is the biggest gainer.

President Trump in a post on TruthSocial on Thursday said 25% tariffs on imports from Canada and Mexico will go into effect on March 4.

The resources heavy exchange has also been impacted by mixed commodity prices. Oil prices rose early on Thursday after U.S. President Donald Trump rescinded Chevron's (CVX) license to export Venezuelan crude oil. Also, natural gas futures rose ahead of fresh inventory data expected to show the largest withdrawal of the year.

But gold traded lower early on Thursday as the dollar moved higher.

For his part, veteran Canadian market watcher David Rosenberg in the summary of a note published yesterday and entitled 'The Truth on Trade, said Trump's tariff policies might finally force Canada to make some structural pro-growth reforms. Inter-provincial trade barriers, and energy and environmental deregulation, would both be good places to start, he added. Meanwhile, Rosenberg noted, the U.S. fiscal deficit is difficult to solve through tariffs -- "entitlement reforms are a more promising avenue."

According to Rosenberg, if Trump does go ahead with his tariff plan after a one-month delay, the "economic detonation" north of the border will resemble the recessions Canada had in the early 1980s and early 1990s, but it won't be as bad as the fallout from the Great Financial Crisis or the pandemic. "But it will be bad," he said. Rosenberg noted Canada can respond with tariffs of its own, though he said export taxes would be preferable. "The best way to cushion the blow over the near-term is to engage in a large-scale fiscal stimulus, and there is ample room for this, and for a massive easing in monetary policy."

Rosenberg said: "Tiff Macklem is correct that the Bank of Canada, with blunt tools, is not exactly a powerful antidote to a trade war with a country that absorbs 20% of GDP, but the reality is that the hit to aggregate demand is deserving of a powerful interest rate (and Canadian dollar) response. Even without the tariffs having yet been imposed, the just-released Nanos survey shows economic optimism in Canada falling all the way back to where it was in the dark pandemic days of 2020. The uncertainty alone has created the conditions for a recession north of the border, and only the most myopic economic departments on Bay Street don't see this unfolding in front of our very eyes."

Rosenberg noted the estimates out there, regarding ending "insane" trade barriers between the Canadian provinces, are that they cost the domestic economy as much as C$200 billion per year. He said there is a +7% boost to GDP right there. "And," Rosenberg added, "Canada needs to start competing head-on with the United States when it comes to deregulation and competitiveness broadly speaking (ending oligopolies in several key industries) and moving effective corporate income tax rates to the levels south of the border to redress the erosion in tax competitiveness, which the current government allowed to unfold with a lack of response to the Trump fiscal moves nearly eight years ago."

Meanwhile, in terms of specific news on Canadian equities, Peter Evans in a story published on the BNN Bloomberg website noted it was "another day, another set of quarterly numbers" from Canada's biggest lenders. Royal Bank, TD and CIBC all posted results before the bell on Thursday, and Evans said the numbers are broadly in line with what we saw from Scotia, BMO and National earlier this week. Evans added: "For the most part, all three lenders reporting this morning beat analyst expectations on most metrics. The capital markets business showed strength across the board, but Royal and CIBC reported higher-than-expected loan loss provisions, while TD's number also went up even as it still came in below expectations. If the banks are setting aside more money to cover potentially bad loans, that doesn't augur well for their outlook on the future and given the uncertainty of tariffs and a looming trade war, who could blame them."