Markets Plus US-Canada Tariffs: Economics and Markets Impact
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Feb 5, 2025 Michael Gregory, Managing Director and Deputy Chief Economist at BMO, shares his insights on U.S. tariffs and their impact on both countries' economies. He discusses the implications for economic growth, inflation, and the Canadian dollar. The conversation reveals how tariffs shape Canada-U.S. trade relations, stressing the need for Canada to diversify its trade partnerships. Gregory also offers strategies for staying optimistic in economic downturns and suggests disciplined investment approaches for 2025, highlighting the potential of both the U.S. and Canadian markets.
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Tariffs and Uncertainty
- The looming threat of U.S. tariffs creates significant economic uncertainty for Canada.
- This uncertainty negatively impacts business investment and growth.
Canadian Export Dependence
- Canadian exports rely heavily on the U.S. market, representing nearly 20% of GDP.
- Manufacturing, particularly motor vehicles and parts, is highly exposed.
Disciplined Investing
- Stay calm and disciplined during market volatility; avoid emotional reactions.
- Focus on fundamentals and long-term opportunities, not short-term market fluctuations.