How Should Canada Handle Tariffs?

How Should Canada Handle Tariffs?

After US President Donald Trump moved to impose 25% tariffs on most Canadian goods, Canada’s Justin Trudeau quickly responded in kind, announcing 25% tariffs on more than $105bn of US imports. Former Canadian Finance Minister and presidential candidate Chrystia Freeland called for a 100% tariff on Tesla [TSLA] imports. Others were more conciliatory: Shopify [SHOP] CEO Tobi Lutke said on X that “hitting back will not lead to anything good. America will shrug it off. Canada will decline.”

Foxconn: Collateral Damage in the Trade War

Taiwanese companies — among them Apple [AAPL] supplier Foxconn [FXCOF] — will have a total $4bn of investments in Mexico in 2025. In response to Trump’s 25% tariff on imports from Mexico, Taiwan’s Ministry of Economic Affairs has pledged support for such firms, Bloomberg reported; this could take the form of relocating production lines, sourcing new investment or lobbying at SelectUSA events, the Ministry said in a statement.

EU Automakers Plummet on Tariffs

Volkswagen [VWAGY] and Stellantis [STLA] led a sharp drop in European auto stocks as Trump’s 25% tariffs on Mexico threaten supply chains. VW, which shipped more than 500,000 cars from Mexico to the US last year, fell 6.7%, while Stellantis, the next largest European producer there, dropped 7%. Mexico’s auto industry, with 330 German supplier sites and 716,000 cars produced in 2023, now faces major uncertainty.

Meta Throws Yet More Cash at VR

Meta’s investment in virtual and augmented reality is set to surpass $100bn in 2025, the Financial Times has unpacked, with CEO Mark Zuckerberg calling the year a “defining” one for its smart glasses. The company invested $19.9bn in Reality Labs last year, a record high after years of losses. Meta’s VR and AR spending since 2014 has exceeded $80bn, and the company expects to invest over $20bn more this year, focusing on its Ray-Ban smart glasses and Quest VR headsets.

Even Bitcoin Takes a Hit

Top cryptocurrencies wobbled as the fall-out from the new tariffs became clear and risk-off sentiment prevailed, Seeking Alpha detailed. “While these tariffs were widely known, the market had been primarily fixated on the DeepSeek saga, seemingly underestimating the geopolitical response and push back from foreign leaders threatening retaliation of those tariffs,” said 10x Research founder Markus Thielen.

Earnings to Watch This Week

Earnings season rolls on regardless of geopolitical upheavals. This week, investors will hear from tech leaders Alphabet [GOOGL] (today), Amazon [AMZN] (on Thursday), and Advanced Micro Devices [AMD], alongside Palantir [PLTR], who reported yesterday, and Pfizer [PFE]. Other notable reports include PepsiCo [PEP], Disney [DIS], Ford [F], PayPal [PYPL], Merck [MRK], Amgen [AMGN], Qualcomm [QCOM] and Eli Lilly [LLY]. 

Alibaba Earnings Preview: Will AI Investments Pay Off? 

In a bid to keep pace with US tech stocks, Alibaba has been betting on artificial intelligence (AI) to help fuel growth in its struggling cloud business, which has seen revenue plummet since 2022. Ahead of its Q3 earnings release on Wednesday, OPTO’s spotlight on BABA stock will look at some of Alibaba’s recent announcements and decisions around AI, and unpack what impact it had on growth in Q2.