Global stocks fall after Trump sets tariff sights on Canada

SYDNEY/LONDON, July 11 (Reuters): Global stocks fell on Friday after US President Donald Trump ramped up his tariff war against Canada, leaving Europe squarely in the firing line, sparking a modest investor push into safe havens like gold, while bitcoin hit a new record high.

The Canadian dollar fell after Trump issued a letter late on Thursday that stated a 35 per cent tariff rate on all imports from Canada would apply from August 1, adding the European Union would receive a letter by Friday.

The US president, whose global wave of tariffs has upended businesses and policymaking, floated a blanket 15 per cent or 20 per cent tariff rate on other countries, a step up from the current 10 per cent baseline rate. This week he surprised Brazil, which has a trade surplus with the United States, with duties of 50 per cent, and hit copper, pharmaceuticals and semiconductor chips.

Aside from pockets of volatility in target currencies, stocks or commodities, markets have offered little in the way of reaction to the onslaught, leaving the VIX volatility index at its lowest since late February.

In Europe, the STOXX 600, which has risen 2.2 per cent this week, fell 0.7 per cent. Futures on the S&P 500 and the Nasdaq fell 0.6 per cent, pointing to a retreat from this week's record highs at the open later.

"The market is becoming a bit numb to these (tariff) announcements, and perhaps it's not until we see hard data showing an impact that we (will) start to see the market reacting," City Index strategist Fiona Cincotta said.

"Obviously, we're getting more information through that does bring with it an element of clarity. Because there is so much uncertainty, there is still this idea that Trump could be open to negotiation, nothing feels 'final' still," she said.

The dollar rose 0.3 per cent against the Canadian dollar to C$1.3695. The euro, which has lost nearly 1 per cent in value since the start of July, was down 0.2 per cent at $1.1683.

Earlier in the week, Trump pushed back his tariff deadline of July 9 to August 1 for many trading partners to allow more time for negotiations, but broadened his trade war, setting new rates for a number of countries, including allies Japan and South Korea, along with a 50 per cent tariff on copper.

Joseph Capurso, head of international economics at the Commonwealth Bank of Australia, said the tariff rate of 35 per cent on Canada was not as bad as feared because most of the imports are still subject to exemptions under the United States-Mexico-Canada Agreement (USMCA).