Here are five things you need to know this morning
Trump roiling markets again: U.S. President Donald Trump has resumed disrupting the global economy and financial markets. Stock futures dropped sharply, and European markets plunged by nearly two per cent after Trump threatened a 50 per cent tariff on goods from the European Union starting on June 1. In an online posting, the U.S. president said the EU “has been very difficult to deal with,” citing several trade irritants. The posting comes after the EU earlier this week made a revived trade proposal with the U.S. in a bid to jump-start their talks.
Trump targets Apple: The U.S. president also fired a shot across the bow of American tech giant Apple this morning, threatening the company with a tariff of at least 25 per cent if it does not manufacture its iPhones in the U.S. Apple shares immediately sank four per cent in premarket trading. Apple manufactures most of its iPhones in China --- it has recently announced plans to shift some of that production to India.
Nuclear stocks rally on Trump report: Meanwhile stocks related to nuclear energy traded higher in the premarket after Reuters reported that Trump will sign executive orders aimed at jump-starting the industry. The process will ease regulatory approvals for new reactors and build up fuel supply chains. The report says the executive order could come as soon as today. Trump declared an energy emergency on his first day in office from the first rise in power demand in two decades.
Trump tax bill could mean major costs for Canada: Meanwhile U.S. President Trump’s new tax bill includes measures that could have significant implications for Canada. The bill would significantly hike rates for Canadian corporations, and The Globe and Mail is reporting that if the bill becomes law, it could cost investors holding U.S. securities up to $81 billion in additional taxes over seven years. Yesterday, the U.S. House of Representatives passed the “One Big Beautiful Bill.” If it becomes law, it will override the existing Canada-U.S. tax treaty. The document includes a proposal designed to retaliate against what the U.S calls “discriminatory or unfair taxes” of foreign countries, including Canada’s digital services tax. Canadian corporations that receive dividends from U.S. subsidiaries are currently subject to a five per cent withholding rate. But under the bill, Canadian companies would see their tax rate increase by five percentage points each year until it reaches 50 per cent. It would remain in place until the “unfair tax” is removed. Similarly, Canadian individuals who own U.S. securities directly are subject to a 15 per cent withholding tax rate under the current treaty. Under the new bill the withholding rate could ultimately rise to 50 per cent.
Canadian retail sales keep rising: Despite the uncertainty sparked by the U.S. trade war, Canadian consumers keep spending. Retail sales rose 0.8 per cent in March compared to the month before. Much of that rise was due to the auto sector… excluding autos retail sales actually fell by 0.7 per cent. Statistics Canada also gave an advance estimate for April, which showed another 0.5 per cent retail increase for that month.
