Contentious Trade Negotiations

Ongoing tariff and trade negotiations between the USA and its major trading partners, Canada and Mexico, are generating considerable uncertainty in financial markets. President Trump announced 25% tariffs on most Canadian and Mexican goods, with a 10% rate carve-out on energy products. China was also targeted for a new 10% tariffs on their goods, and has announced retaliatory tariffs on energy, machinery, vehicles, and more.

Markets recovered somewhat upon the announcement that tariffs on Mexico and Canada would be paused for a month to allow for further negotiation. Barring any new developments, other tariffs are scheduled to go into effect on February 4th. Investors should keep in mind that markets don’t generally like uncertainty. When markets pull back due to negative news, it creates an opportunity for investors to add to their positions at a discount. Adding shares over time builds overall value but requires discipline and patience. Regardless of the headlines, spread risk, buy quality, and let time be your friend.