With the stock market under further volatility and oil prices dropping, Canadian investors are under immense danger. That’s why recent announcements regarding tariffs from U.S. President Donald Trump have experts buzzing. They are calling on investors to not waver from their investment plans in light of these developments. Chris Porochnuk, a highly respected financial analyst, encourages everyone to stay tuned into the bigger picture and not be distracted by short term market turbulence.
Porochnuk urges investors not to give in to the fear. He states, “You’ve got to stay on the focus to the long-term.” The S&P/TSX composite index is down over 4.5 per cent. At the same time, U.S. indexes are in deep correction territory, with losses topping five percent. This persistent underperformance by the sectors, especially U.S. technology, has only added to overall investor confusion and discontent.
Trump’s announcement of a new 25 percent tariff on automobile imports takes effect this Thursday. This decision is particularly unfortunate because of the current market reality. He’s used the same flimsy logic to impose tariffs on all steel and aluminum imports from other countries—including our northern neighbor, Canada. This action aims at keeping out what the administration considers to be bad or anti-competitive trade practices. Unfortunately, it has done so while raising grave concerns in the Canadian investor community.
Yet Porochnuk is perhaps most alarmed by the market’s precipitous drop. It hasn’t reached the catastrophic depths of March 2020, when the TSX crashed 30 percent. He encourages investors to keep this perspective in mind: “Eventually the markets do eventually rebound from it. Right now we’re still trying to see where that footing is as to when things will start that rebound.”
Furthermore, Trump unveiled a comprehensive list of higher tariffs affecting numerous countries and a 10 percent baseline tariff on imports from most nations. A subsequent White House fact sheet made clear that goods imported under the CUSMA free-trade pact will remain exempt from the new tariffs. Yet every import not covered under this agreement will be subjected to these climbing levies.
To put it simply, the Canadian economy is fragile right now. It runs the risk of triggering economy-wide Section 301 duties over fentanyl trafficking, a risk that applies to Mexico. Porochnuk cautions against panic selling in this time of market softness. Liquidating stable blue-chip investments or discarding long-term strategies usually have the potential for bad results.
