The stock market, much like a seasoned ballroom dancer, has once again found itself waltzing (or perhaps, stumbling) to the unpredictable rhythm of President Donald Trump’s trade policy pronouncements. Just when investors thought they had mastered the cha-cha of global trade, a new, rather aggressive, 35% tariff on Canadian imports has sent the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite into a familiar dip, proving that when it comes to Trump and tariffs, the only constant is change.
The Great White North Gets the Red-Hot Tariff Treatment
On Friday, July 11, 2025, markets across the globe collectively sighed as President Trump, via a letter to Canadian Prime Minister Mark Carney (and subsequently, a post on his preferred digital megaphone, Truth Social), announced a hefty 35% tariff on Canadian goods, effective August 1. The stated reasons? A colorful mix, including accusations of Canada failing to stem the flow of fentanyl into the U.S. and, naturally, Canada’s own “reciprocal tariffs” implemented in response to previous U.S. levies. It appears the “art of the deal” now involves public letters and social media broadsides, keeping everyone on their toes – especially those whose portfolios are directly impacted.
The immediate market reaction was as predictable as a summer blockbuster sequel: stocks dropped. The Dow Jones Industrial Average fell 0.6%, while the S&P 500 shed 0.3%, and the tech-heavy Nasdaq Composite slipped 0.2% by Friday’s close. This pullback came just a day after both the S&P 500 and Nasdaq had closed at record highs, a testament to the market’s seemingly boundless optimism, or perhaps, its short-term memory. The Canadian dollar, naturally, felt the pinch, with the U.S. dollar rising 0.3% against it, pushing the USD/CAD pair towards 1.3700.
The Recurring Tariff Nightmare: A Market’s Groundhog Day
This isn’t President Trump’s first rodeo with tariffs, nor is it the market’s first collective gasp. Indeed, the financial world has become accustomed to these sudden policy shifts, often announced with the subtlety of a bull in a china shop. Forbes, just a day prior, highlighted Trump’s extensive history of “tariff flip-flops,” noting his insistence on his tariff policy despite numerous reversals and adjustments. It’s a policy approach that, as one analyst from City Index, Fiona Cincotta, aptly put it, has left the market “a bit numb.” The VIX volatility index, often called the market’s fear gauge, remained stubbornly low, suggesting that while the headlines are alarming, the underlying sentiment is one of weary acceptance rather than outright panic.
This latest Canadian tariff follows a similar playbook seen earlier in the week when Brazil was hit with a surprising 50% duty, and threats were floated for a blanket 15% or 20% tariff rate on “all remaining countries” who hadn’t yet received their personalized tariff notice. Copper imports, pharmaceuticals, and semiconductor chips have also found themselves in the crosshairs, demonstrating the broad and somewhat arbitrary nature of these trade interventions.
Sectoral Swings and Analyst Squints
While the major indices saw a broad decline, the impact wasn’t uniform. Sectors directly implicated in trade, such as agriculture and metals, are understandably under scrutiny. Iowa farmers and agricultural economists are already expressing concern over the long-term impacts of these unpredictable trade policies, fearing a hit to market prices for their produce. Deere & Company (DE), a bellwether for agricultural machinery, saw its shares trade down $6.69 on Friday, closing at $512.51. Meanwhile, Freeport-McMoRan (FCX), a major player in metals, slipped $1.07 to $46.14.
Conversely, some sectors showed resilience, or even gains, amidst the tariff turmoil. Gold stocks, often seen as a safe haven during economic uncertainty, continued their upward trend. New Gold Inc. (NGD), a Canadian miner, has more than doubled in the past year, with its stock currently around $4.70. Gold prices themselves have been hovering near all-time highs, breaking above $3,500 an ounce in April 2025.
Big Tech, which has largely paced the recent market rally, presented a mixed bag. NVIDIA (NVDA), fresh off its historic achievement of being the first company to close with a $4 trillion market capitalization, saw its shares rise 0.5% on Friday, closing at $166.43. This resilience suggests that the AI chip giant’s growth trajectory might be somewhat insulated from immediate trade spats, at least for now. Amazon (AMZN) climbed about 1%, while Alphabet (GOOG) and Tesla (TSLA) gained more than 1%. However, Meta Platforms (META) dropped more than 1%, and Apple (AAPL) and Broadcom (AVGO) fell slightly.
Pharmaceutical stocks, surprisingly, bucked the broader market trend. The Nifty Pharma Index in India registered a strong gain of 1.01%, fueled by companies like Glenmark Pharmaceuticals, which soared 10% after a licensing agreement with U.S.-based AbbVie (ABBV). AbbVie itself traded down $2.77 to $192.23 on Friday. This divergence highlights that company-specific news and defensive buying can sometimes override macro-level trade concerns.
Analysts, meanwhile, are left to decipher the tea leaves of an increasingly unpredictable trade landscape. Peter Draper, a professor and executive director at the Institute for International Trade at the University of Adelaide, noted that the U.S. is “not exactly in negotiations mode, it’s in demand-making mode,” simply expecting countries to concede. This “arbitrary trade policy at its worst” injects an “extra element of uncertainty” into trade relations. Goldman Sachs Research estimates that the effective U.S. tariff rate has already risen by roughly 10 percentage points to 13% this year, with a potential increase to 17%. They anticipate that companies will pass on about 70% of these costs to consumers through higher prices, potentially leading to a short-run income loss of $2,500 per household on average in 2025.
The Enduring Paradox: Volatility Meets Resilience
Despite the constant barrage of tariff threats and actual implementations, the market’s overall resilience remains a curious phenomenon. As one strategist observed, the market seems to be developing “tariff fatigue,” becoming “a bit numb to these announcements.” Perhaps the underlying belief is that these measures, however disruptive in the short term, are always open to negotiation and thus “nothing feels ‘final’ still.”
So, as President Trump continues his unique brand of economic diplomacy, the stock market continues its peculiar dance. It dips, it recovers, it shrugs, and occasionally, it even hits new highs, all while navigating a policy landscape that shifts faster than a social media trend. For investors, it’s less about predicting the next move and more about bracing for impact, diversifying, and perhaps, investing in a good set of earplugs for the next policy announcement from Truth Social. The show, it seems, must go on.
DISCLAIMER: We read Trump’s posts so you don’t have to. This is comedy meets market data, not financial advice. Not political advice either – we just like charts and chaos.
Elana Harper is a seasoned financial editor and market analyst with over a decade of experience covering global equities, economic trends, and corporate earnings. Known for her sharp insights, Elana specializes in making complex financial topics accessible to a broad audience. She now serves as the Senior Financial Editor at Stock Market Watch, where she oversees daily market coverage and political commentary.