President Trump’s tariff policy has had a seismic impact on global markets and caused borrowing costs for the United States (U.S.) government to spike. Major U.S. stock exchanges surged after Trump stated that he would pause higher tariff rates for 90 days on a multitude of U.S. trading partners, while maintaining the 10 per cent baseline levy he imposed earlier this month.

“Liberation Day” delivered the implementation of a universal tariff of 10 per cent on all imports as well as reciprocal tariffs by the United States (U.S.) on pretty much the rest of the world. President Trump enacted these tariffs on U.S. trading partners and, in particular, on those that contribute the most to the trillion dollar U.S. trade deficit. We won’t go so far as to call them reciprocal because… well, they aren’t.

Trade deficits are mentioned almost as much as tariffs these days. But, trade deficits are nothing new. Take the United States (U.S.), for example. They have run a persistent trade deficit since the 1970s. They also ran one through most of the 19^th century.

It was not until the U.S. advanced and began to surpass other manufacturing-based economies that the trade balance went from persistent deficits to persistent surpluses in the first part of the 20^th century.

Economics is a branch of social science that focuses on the production, consumption and transfer of wealth. It is broken into macroeconomics and microeconomics. Macroeconomics focuses on large-scale factors - interest rates, national and international productivity, etc. Microeconomics, on the other hand,  focuses on the behaviour of individuals, businesses and organisations, when it comes to using their wealth.

So what does this have to do with investing?

Canada has weathered trade wars with the United States as far back as the late 19th century. Tariffs can affect economic growth, consumer spending, trade flows, government revenue, exchange rates, employment, and inflation. As a result, tariffs can and do introduce a layer of uncertainty.

We don’t want to speak for everyone, but juggling the tariffs-on, tariffs-off, tariffs-back-on, and maybe-tariffs-will-be-cancelled balls is getting a bit frustrating. And the markets seem to agree. Up, down, up, down. We’re all getting tired!

Does the size of a business matter?

Larger companies certainly have some advantages. Their size often provides easier access to funding, higher brand recognition, and an established position in the market with support of existing customers.

We can’t seem to stop talking about the impact of trade tariffs on economies and stock markets. But while everyone is distracted by that conversation, another important issue is lurking in the background that could have as big an impact, if not a bigger one. National debt.

Valentine’s Day occurs this week. And, almost on cue, the price of flowers (particularly roses), chocolates, jewellery and dining go up, as people celebrate in Canada, the United States (U.S.) and around the globe. The history of Valentine’s Day, however, is quite dark. We’ve included some links on the side bar, if you want to go down that rabbit hole. All of this said, it appears that U.S. imports of products for Valentine’s Day have avoided import tariffs in 2025. The story for 2026, however, could be significantly different.

Topics for weekly updates often come from questions asked by our clients. It should come as no surprise that tariffs have been on everyone’s mind. How could they not be? It’s all the media has talked about for the past two weeks. So… whether tariffs are on, off, or off and then on, how does a tariff imposed by the United States (U.S.) on Canadian exports impact the economy, equity markets and, of course, investment portfolios?