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Trump’s steel, aluminum tariffs may rattle Canada’s economy and Nafta

Although things can change between now and April 11, when Trump will decide whether the steel rate will be imposed, and April 19, when he has to decide on aluminum rates, shares have been hit by the announcement.

The Composite Index S & P / TSX representing Canadian stocks did not hit as hard as the S & P 500, which fell by 0.5 percent, but some companies have their share prices significantly decrease. Global auto parts supplier Magna, for example, has fallen by 3.5 percent and giant space giant Bombardier declined by nearly 6 percent when the markets opened Friday, but have since regained some ground.

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Jeff Mills, managing director and co-chief investment strategist at the Pittsburgh-based PNC Management Group, is not surprised that shares in the US and elsewhere are sold after the announcement, although US stocks rebound on Friday afternoon.

"The policy change is likely to increase costs for all consumers, which means that it will serve to reduce part of the benefit of the recently adopted tax law," he said. "Markets are now worried about countermeasures from other countries, and investors are starting to wonder what other protectionist measures Trump might take."

Schwartz of Basking Financial does not think that the Canadian stock market will have such a huge impact on these rates – the S & P / TSX is already performing worse than other markets – but if a trade war occurs, shares in Canada will and see great declines all over the world.

"Who knows what will happen, but I assume the direction would be negative," he said. "The price of goods for everything around the world would rise, inflation would rise and while companies would eventually adjust to inflation, shares will be negative while that adjustment period is taking place. "

Global investors can not do much now, Mills added, because the precise details are still largely unknown, although he thinks people should generally make sure they feel comfortable with the risk they take in their portfolios. However, all investors interested in Canada should hope that Trump at least exempts the country from customs duties.

"Canada is probably the most punished as business is today," Mills said. "Perhaps cooler heads predominate during the weekend and the rates are ultimately less broad based."

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