This article explores the potential impact of Donald Trump's proposed tariffs on Canada and Mexico on the global markets in 2025. It analyzes the economic ramifications of these tariffs and discusses the uncertainty they create for investors.
A flock of black swans is about to descend on the markets. Here’s what I see ahead for investors in 2025All things being equal, 2025 should be shaping up as a good year for the Canadian economy in general and the TSX in particular. Interest rates are down and are poised to fall even further. Inflation appears to have been tamed, at least for now. The economy may be sluggish but seemed to be headed for a soft landing. At least it was until U.S.
president-elect Donald Trump announced his intention to slap a 25-per-cent tariff on all imports from Canada and Mexico on the day he takes office, Jan. 20. Ostensibly, the tariffs are in direct response to migrants and drugs pouring into the U.S. Mr. Trump said they will remain in place until both countries tighten up the borders. Until then, Canada and Mexico will “pay a very big price!” The policy is absurd on many levels. To equate the Canadian and Mexican borders in terms of porousness is bizarre. To suggest only Canada and Mexico, but not the U.S., will pay a price is disingenuous – the U.S. economy will also take a big hit. Moreover, it now appears that whatever we do about the border will not be enough. Mr. Trump has since claimed that the U.S. is “subsidizing” Canada to the tune of $100-billion a year. It’s unclear where that number comes from, and it may not matter. With his subsequent comments about Greenland and the Panama Canal, Mr. Trump seems to be setting the stage for an expansionist foreign policy aimed at unifying the North American continent north of Mexico under the American flag and regaining control of the Canal Zone. For different reasons, Mr. Trump is also seen as a threat to U.S. stock markets this year because of the uncertainty he brings to the Oval Office. Investors like his tax reduction and regulation slashing policies. They don’t like his tariff plans, which could raise U.S. prices on everything from oil to clothing, while squeezing profit margins for a wide range of companie
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