Everything You Need to Know on Wednesday: Canada Considers Tariffs and Investment Blocks on Chinese EVs

Good morning mooers! Here are things you need to know about today's market:

● S&P/TSX 60 Index Standard Futures are trading at 1,323.80, up 0.70%

● Oil prices inch up amid surprising U.S. inventory drop

● Canada considers tariffs and investment blocks on Chinese EVs

● Canadian pension funds suffer real estate losses, rethink strategies

Today, the Canadian dollar is trading at 72.90 cents US, a slight increase from Tuesday.

S&P/TSX 60 Index Standard Futures are trading at 1,323.80, up 0.70% from previous close.

Oil prices edged higher following a significant decrease in U.S. crude inventories, overshadowing a rise in gasoline stocks and dispelling some demand concerns. West Texas Intermediate crude and Brent crude both saw modest gains. Despite market expectations for a small inventory decline, the American Petroleum Institute reported a sharp drop of over 9 million barrels. Conversely, gasoline stockpiles unexpectedly increased. Official data from the Energy Information Administration is anticipated later today. Meanwhile, Hurricane Beryl, now a Category 3 storm, is moving through the southern Gulf without impacting U.S. oil operations.

Canada is exploring measures, such as tariffs and restricting Chinese investment in manufacturing, to protect its electric vehicle (EV) market from Chinese competition. The Trudeau government's proposals, mainly targeting finished EVs, exclude batteries and components. The initiative, part of mandatory pre-tariff consultations, opens for stakeholder feedback until August 1. The move responds to concerns over China's unfair market practices and potential threats to Canada's EV sector. No specific tariff rates are suggested; instead, the paper seeks input on appropriate rates and their impact on EV affordability.

Major Canadian pension funds, with a collective $1.24 trillion in assets, are reeling from significant losses in their real estate portfolios. The Canada Pension Plan Investment Board faced a 5% loss, while the Public Sector Pension Investment Board recorded a 16% downturn, marking its worst year since the financial crisis. High borrowing costs are disrupting the property market and prompting these funds, once renowned for their real estate prowess, to overhaul their operations.

Ontario Teachers' Pension Plan CEO Jo Taylor has shifted real estate investment strategies in-house after the worst four-year performance since acquiring Cadillac Fairview in 2000. Similarly, Caisse de Depot et Placement du Quebec, after a 6.2% real estate loss, is merging its property arm with its lending business to cut costs.

The restructuring reflects a shift in the global real estate market, characterized by tougher conditions, higher interest rates, and increased competition. The Canadian funds are adapting by pursuing more co-investments and third-party management rather than direct investments, aiming for greater flexibility and responsiveness to market changes.