Market Insights: The Great Trade War of 2025

Invoking emergency powers due to the stated “threat posed by illegal aliens and drugs,” President Trump implemented a 10% tariff on imports from China, a 25% tariff on imports from Mexico, and—perhaps most surprisingly—a 25% tariff on imports from Canada (except for Canadian energy imports that receive a 10% tariff). These tariffs are sending shockwaves through financial markets both in North America and around the globe as investors reevaluate their portfolio positioning and investment strategies. In the short-term, risks are heightened.

For more market insights, explore the 2025 Market Outlook that sees higher volatility in the first half of 2025 precisely due to disruptions such as tariffs. For the full year, however, the bigger driver of the economy and markets should be productivity growth, which both moderates inflation and raises corporate profits.