Stay informed about the domestic and global impacts of U.S. tariffs amid economic unpredictability.

Introduction

Global equity markets declined over the month of March. Growing trade tensions and fears of a strong pullback in economic activity in response to tariffs weighed on investor sentiment. Tariffs came into effect in March, with more expected in April. The Bank of Canada (“BoC”) and European Central Bank (“ECB”) lowered interest rates over the month, citing concerns over global trade tensions.

In Canada, an uncertain outlook for the economy has begun to weigh on consumer and business activity. Consumer spending has subsided while businesses expect to slow hiring and capital expenditures. Inflation moved higher, in large part due to the end of the sales tax holiday. Manufacturing activity has weakened in recent months. Canada’s manufacturing sector could be hindered by extensive tariffs.

The S&P/TSX Composite Index declined, dragged down by the Information Technology and Industrials sectors. U.S. equities fell sharply over the month. Yields on 10-year Government of Canada bonds edged higher over the month, while those in the U.S. were largely unchanged. The price of oil moved higher. The price of gold increased to a new record high as investors searched for safety amid the economic uncertainty.

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