Canada election: As party leaders campaign in Quebec, future of CBC/Radio-Canada moves into spotlight [Video]

Just before 1:30 p.m. ET, Canada’s main stock index was down almost 1,200 points, or 4.88 per cent, with U.S. markets also in the red for the second day in a row after Trump announced sweeping tariffs across the globe.

Earl Davis, head of fixed income and money markets at BMO Global Asset Management, described why Trump’s Wednesday tariffs are driving losses on the Toronto Stock Exchange, but not necessarily for the reason you’d think.

Even though a 25 per cent tariff on vehicles imported to the U.S. has kicked in, “the tariffs that were proposed Wednesday night didn’t include Canada in regards to retaliatory tariffs. That’s why we saw a rally in the Canadian dollar yesterday,” said Davis.

“This major sell-off is driven by global growth, which does have implications on Canada,” he explained. “The reason why it has implications on Canada, [is] one of the largest tariffs was …