U.S. President Donald Trump threatened a 100% tariff on Canadian goods if the country pursues a trade deal with China, escalating tensions between the two nations. The move comes as Japan’s Prime Minister dissolved parliament ahead of snap elections and pledged to intervene in market speculation.
Trump Threatens Tariff on Canada
“If Canada makes a deal with China, it will immediately be hit with a 100% Tariff,” Trump wrote in a post on Saturday. Canada earlier this month reached a preliminary deal to lower trade barriers with Beijing.
The escalation follows Trump’s withdrawal of an invitation for Canadian Prime Minister Mark Carney to join his “Board of Peace,” a council established to oversee the reconstruction of Gaza.
Japan Vows Market Intervention
Japanese Prime Minister Sanae Takaichi dissolved parliament on Friday, setting the stage for elections on Feb. 8. She pledged Sunday to intervene in “speculative or very abnormal moves” in the Japanese yen and government bonds, which have recently experienced sell-offs.
These developments have implications for U.S. markets, as Japan is the largest foreign holder of U.S. Treasurys. Rising Japanese bond yields could increase U.S. borrowing costs.
Market Reaction
U.S. Treasurys were relatively unchanged Friday, as was the S&P 500. The Nasdaq Composite rose 0.28%, while the Dow Jones Industrial Average lost 0.58%.
Futures slid Sunday night as investors prepared for a busy week, including earnings reports from Apple, Meta, and Microsoft, and the Federal Reserve’s rate-setting meeting on Wednesday.
What You Need to Know Today
Trump threatens 100% tariff on Canada. The president made the threat in a Truth Social post on Saturday.
Japan vows to intervene in market speculation. Prime Minister Takaichi pledged action against “speculative or very abnormal market moves.”
India plans to slash tariffs on EU cars. Duties on cars with an import price exceeding 15,000 euros will be reduced to 40%, and eventually 10%.
U.S. stocks were mixed Friday. Goldman Sachs shares fell nearly 4%, while Intel tumbled roughly 17%. Nvidia and Advanced Micro Devices climbed 1.5% and more than 2%, respectively. Europe’s Stoxx 600 closed mostly flat. Gold prices surged past $5,000 on Monday.
[PRO] A new AI stock trend in China. Concerns about an AI chip bubble are shifting investor focus toward AI applications.
And Finally…
Investors who attended the World Economic Forum in Davos found conversations shifting from artificial intelligence to geopolitical tensions and the changing global rules of investment.
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