CNBC Daily Open: Canada is drawing Trump’s ire — and faces a 100% tariff

“Good fences make good neighbors,” goes the saying — one that seems to encapsulate U.S. President Donald Trump’s threat of slapping tariffs of 100% on Canada if the country strikes a trade deal with China.  

That comes after Trump on Thursday withdrew his invitation to Canadian Prime Minister Mark Carney for the country to join his “Board of Peace,” a council originally established to oversee the reconstruction of Gaza.

Such estrangement with the U.S.’ northern neighbor, however, was probably not what poet Robert Frost meant when he penned the line, often taken out of context.  

Frost goes on to write, “Before I built a wall I’d ask to know / What I was walling in or walling out, / And to whom I was like to give offense.” That context feels relevant as Washington’s relationship with Canada grows more strained.

Across the Pacific, uncertainty took a different form. Sanae Takaichi, Japan’s Prime Minister, dissolved parliament on Friday ahead of snap elections scheduled for Feb. 8. On Sunday, she pledged to intervene in “speculative or very abnormal moves” in the Japanese yen and government bonds, which sold off in recent weeks.

Both moves have a direct implication on U.S. markets, given that Japan is the biggest foreign holder of U.S. Treasurys, according to the U.S. Treasury Department. Rising Japanese bond yields could entice domestic investors to repatriate capital, putting upward pressure on U.S. borrowing costs.

So far, markets have taken the developments in stride. U.S. Treasurys were relatively unchanged on Friday stateside, as was the S&P 500. The Nasdaq Composite rose 0.28% and the Dow Jones Industrial Average lost 0.58%.

The calm did not carry into the new week. Futures slid Sunday night stateside as investors prepared for a busy week of trading. Apple, Meta and Microsoft are set to report earnings and the Federal Reserve concludes its rate-setting meeting on Wednesday.

Trump threatens 100% tariff on Canada. “If Canada makes a deal with China, it will immediately be hit with a 100% Tariff,” the president wrote in a Truth Social post on Saturday. Canada earlier this month reached a preliminary deal to lower trade barriers with Beijing.

Japan vows to intervene in market speculation. Investors have sold off Japanese government bonds and yen in the past weeks. “The government will take necessary steps against speculative or very abnormal market moves,” Prime Minister Sanae Takaichi said Sunday.

India plans to slash tariffs on EU cars. Cars from the European Union with an import price of more than 15,000 euros ($17,800) will face duties of 40%, down from as high as 110%, Reuters reported, citing two sources. The tariffs will be lowered to 10% over time.

U.S. stocks were mixed Friday. Goldman Sachs shares fell nearly 4%, Intel tumbled roughly 17%, while Nvidia and Advanced Micro Devices climbed 1.5% and more than 2%, respectively. Europe’s Stoxx 600 closed mostly flat. Gold prices surged past $5,000 on Monday.

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Investors went to Davos for AI. They left talking about Greenland

Moving between panels, hotel lobbies, and meetings last week, it often felt like two conferences were happening in the same snowy Swiss village.

In one Davos, the mood was strikingly optimistic. Executives and investors spoke about artificial intelligence moving from hype to production, terms like “world models” and “physical AI” were being thrown around.

In the other, conversations seemed to end up back at tariffs, Greenland, geopolitical tensions, and a growing sense that the global rules investors have relied on for decades are shifting in real time.

— Spriha Srivastava