Over the weekend, President Trump signed an executive order imposing tariffs on goods from Canada, Mexico, and China. This included a 25% tax on Canadian and Mexican imports and a 10% levy on Chinese goods. Canadian energy imports received a slightly lower tariff of 10%.

In response, the Canadian government announced new tariffs on U.S. imports, which will be introduced in two phases:

• Effective tomorrow (Feb 4): A 25% tariff on C$30 billion worth of U.S. goods.
• Effective February 25: The 25% tariff will expand to include additional U.S. products valued at C$125 billion.

These tariffs strategically target U.S. goods such as alcoholic beverages, food, clothing, and appliances, while minimizing the economic impact on Canada. Mexico is expected to follow suit with a similar strategy.

The Role of Diversification

While trade tensions and tariffs often lead to market volatility, they also highlight the importance of a well-diversified portfolio. Diversification is your best defense in times of uncertainty. It spreads risk and ensures your portfolio has exposure to opportunities across asset classes, sectors, and geographies.

Currency Implications

The Canadian dollar has depreciated more than 4% against the U.S. dollar in the past three months. While this might seem concerning, currency fluctuations can act as a buffer, making Canadian exports more competitive and less expensive for foreign buyers.

Looking Ahead

The current trade dynamics emphasize the need for a long-term perspective. Canadian and Mexican measures are carefully designed to mitigate domestic economic fallout, and proactive policies like fiscal stimulus and monetary adjustments are expected to cushion the impact.

Gardhouse Financial remains committed to monitoring developments and ensuring your portfolio is positioned to navigate these challenges while capturing emerging opportunities. Times like these reinforce why diversification is more than just a strategy—it’s a necessity.

If you have any questions about your portfolio or wish to discuss how to strengthen your investment strategy during this period, don’t hesitate to reach out.

Let’s stay the course together.