Nothing shakes things up like a trade war and tariffs. When U.S. President Donald Trump threatened, imposed, and then hit pause on his tariffs, it sent shockwaves through markets, businesses, and economies. Canada and Mexico scrambled to adjust, but even with most of the 25% tariffs on hold, the effects are still unfolding.
Markets reacted fast last week. The S&P 500 took a dip briefly as investors rushed to sell, worried about the economic fallout of the possibility of disrupted supply chains and climbing business costs. Even the TSX had a moment of panic before bouncing back. Make no mistake any trade war brings market volatility.
Then there’s the Canadian dollar, which dropped below $0.70 U.S., and analysts think it could sink even lower. That could have major consequences for our economy.
So, what does this mean for your retirement? If your investments lean toward Canadian businesses that don’t rely much on U.S. trade, you might be in a better spot for now. A weaker Canada dollar though, could shake things up. Exporters could benefit, while importers could struggle.
Take the auto and energy industries, for example. Most cars made in Canada go straight to the U.S., so any tariffs could hit hard, leading to job losses and production cuts almost immediately. The energy sector would feel it too, though more gradually. As mentioned earlier, a weaker loonie makes our oil exports more attractive, but only to a point. The industry might have to look to expanding further into other markets, like Asia, to stay competitive.
As Dave always says, diversification is key. You don’t want all your financial eggs in one basket. That way, you’re not overly exposed to just one scenario. The best move? Talk to a financial advisor. That way, you’re making smart, informed decisions instead of reacting out of fear.
Dave, Faisal, Leanna, and Rob dive into these issues at our retirement seminars. Even if you already have an advisor, come see how our team can help you navigate retirement with confidence. Seats fill up fast, so grab yours today! Register Jeremy Schrader More Than Money
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