Global Economy and Markets Under the Shadow of Tariffs: How to Build a Resilient Investment Strategy
Amid renewed tariff threats from the Trump administration, global markets have experienced renewed turbulence. Tariff policies can have far-reaching impacts on inflation, consumer confidence, corporate investment decisions, and even international relations. In this heightened climate of uncertainty, how should investors interpret the macroeconomic signals behind these developments? What key variables will shape market movements ahead? And how can one strike a balance between stability and growth during volatile times?
In AimStar’s latest strategy report, Scott Cheng, Senior Vice President and Portfolio Manager, notes that the Trump administration’s tariff actions are injecting significant uncertainty into the global economic outlook, inflation trajectory, and market sentiment.
Key Highlights from the Report:
Short-Term Strategy: Adopt a defensive asset allocation by increasing exposure to fixed income and defensive equity sectors.
Medium-Term Outlook: Stay responsive to macroeconomic indicators and corporate earnings data, with flexibility to adjust portfolio allocations accordingly.
Long-Term Core View: Maintain diversification and a long-term investment approach, seizing opportunities during structural pullbacks.
The report also points out that current market valuations have corrected to relatively reasonable levels. Should trade tensions ease or the Federal Reserve signal a shift toward monetary accommodation, a technical rebound may follow.
👉 For the full analysis, read the article:
Canada Faces Weak Growth Outlook as Tariff Fallout Deepens
As Canadians head to the polls today, economists warn that the next federal government will inherit an economy battered by Donald Trump’s trade war and slowing U.S. and global growth.
Fresh GDP data due two days after the election is expected to confirm the weakness. Royal Bank of Canada forecasts flat February GDP and the first per capita decline in three months, with an even softer early estimate for March.
The impact of tariffs is already surfacing: Canada’s unemployment rate rose to 6.7% in March after an unexpected loss of 33,000 jobs, while home sales have fallen 12% since January.
Desjardins Group expects Canada to enter a technical recession, projecting real GDP contraction in the second and third quarters. Oxford Economics forecasts an even deeper downturn, with GDP falling 1.3% from Q2 2025 to Q1 2026.
While some, including National Bank of Canada and Capital Economics, believe a full recession can still be avoided, they predict stagnant growth and rising unemployment towards 7%.
Scotiabank offers a comparatively optimistic view, projecting 1.6% GDP growth for the year, citing Canada’s more resilient fiscal position relative to the U.S.
Economists broadly expect the Bank of Canada to resume rate cuts, with at least two reductions anticipated this year and a potential 50-basis-point cut as early as June. The current policy rate stands at 2.75%, with terminal rate forecasts between 2.25% and 1.75%.
Conservative leader Pierre Poilievre, left, and Liberal leader Mark Carney on campaign stops this weekend ahead of today’s vote. Photo by GEOFF ROBINS/AFP via Getty Images; Michelle Berg/Postmedia
"Navigating Market Strategy Amid the 2025 Trade War" — a comprehensive outlook by Scott Cheng, Portfolio Manager at AimStar.
Trump’s Tariff Threat Puts Canada’s Lumber Industry and U.S. Housing Market at Risk
Donald Trump’s proposed tariffs on Canadian lumber — on top of existing duties — threaten to severely disrupt Canada’s forestry industry and exacerbate the U.S. housing crisis.
Canada exported over C$15 billion of lumber and sawmill products to the U.S. in 2024, with a significant share already subject to a 14.54% import duty, set to rise to 34.45% in October. Trump’s potential additional 25% tariff could further cripple lumber towns in British Columbia, Ontario, and Quebec.
Analysts warn that U.S. homebuilders, heavily reliant on Canadian spruce for its quality and workability, would face higher costs, worsening America’s existing shortage of affordable housing. The U.S. imports about 30% of its lumber needs, 80% of which comes from Canada.
In British Columbia, regulatory hurdles and underharvesting have already put pressure on the industry, leading to mill closures and job losses. Trump’s tariffs could accelerate this downturn, while in northern Ontario, mills such as Lecours Lumber are bracing for reduced demand.
Despite hopes to redirect more lumber to the domestic market, structural challenges — including Canada’s heavy reliance on the U.S. imperial system — make rapid diversification difficult. Industry experts caution that without a trade resolution, Canadian forestry faces long-term risks.
Adding to the pressure, environmental challenges threaten the longevity of key timber species like black spruce, with forecasts warning of large-scale forest reproductive failure by 2050.
Local leaders like Port McNeill Mayor James Furney remain cautiously optimistic, emphasizing resilience: “We will endeavour to persevere.”
This article is based on Joe O’Connor’s reporting for the Financial Post, published on April 23, 2025.
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Pre-Market Overview for This Week
Canadian Stock Market
Canadian stocks edged lower on Friday as investors continued to monitor global trade developments and corporate earnings performance. The S&P/TSX Composite Index slipped 17 points to close at 24,711, ending a three-day winning streak. However, supported by gains in technology and utilities sectors, the index still posted a 2.1% weekly gain, marking its third consecutive week of advances.
On Friday, weakness in industrials, mining, and healthcare sectors weighed on the broader market. Among individual stocks, NovaGold Resources, Energy Fuels, TFI International, and WSP Global were among the top decliners.
Looking ahead to this week, softer commodity prices may pressure resource stocks, while market volatility is expected to increase as Canadians head to the polls for the federal election.
U.S. Stock Market
U.S. stocks rose on Friday, with all three major indexes posting weekly gains. The S&P 500 and Nasdaq were boosted by strength in the artificial intelligence sector, while the Dow Jones Industrial Average was relatively flat. The small-cap Russell 2000 Index recorded its largest weekly gain since November 2023.
As earnings season progresses, 179 S&P 500 companies have reported results, with 73% surpassing expectations. Analysts now forecast first-quarter S&P 500 earnings growth of 9.7% year-over-year, up from 8% at the start of the month. However, investors remain focused on forward guidance amid ongoing economic uncertainty and concerns about slowing consumer spending.
On the economic front, the University of Michigan’s April consumer sentiment index was revised higher but remains at its lowest level since July 2022, while inflation expectations remain elevated.
In Friday’s session, the Dow edged up 0.05%, the S&P 500 gained 0.74%, and the Nasdaq rose 1.26%. Sector-wise, consumer discretionary and technology outperformed, while materials lagged.
Currency Markets
The U.S. dollar edged higher on Friday, with the Dollar Index gaining 0.07%, marking its first weekly advance since mid-March. Throughout the week, the greenback’s movement was volatile as conflicting signals emerged over whether global tariff tensions were easing. City Index strategist Fiona Cincotta noted that while clarity remains elusive, market sentiment appears to be shifting toward de-escalation rather than further escalation. Although the dollar has exited oversold territory, Cincotta cautioned that it is too early to declare a full recovery.
The dollar rose 0.67% against the yen to 143.56 and gained 0.09% against the Swiss franc to 0.8270. Meanwhile, the euro weakened 0.11% to 1.1377 against the dollar, and the British pound edged down 0.1% to 1.3325 despite stronger-than-expected U.K. retail sales data.
On the trade front, early negotiations between the U.S. and its Asian allies, Japan and South Korea, have shown some progress. Japanese Finance Minister Shunichi Suzuki said after meeting U.S. Treasury Secretary Janet Yellen that there were no discussions about setting exchange rate targets. Separately, Bank of Japan Governor Kazuo Ueda reaffirmed that if underlying inflation trends toward the 2% target as expected, the central bank will continue tightening policy, while closely monitoring the impact of U.S. tariffs. Markets broadly expect the BOJ to keep rates unchanged at its upcoming policy meeting concluding May 1.
Gold & Oil Markets
Gold Market:
Gold prices fell on Friday, with spot gold down 1.7% to $3,292.99 per ounce after earlier dropping as much as 2%. For the week, gold declined by 1.2%. A stronger U.S. dollar and signs of easing trade tensions weighed on bullion. Daniel Ghali, commodity strategist at TD Securities, noted that while tariff de-escalation has pressured gold, there has not been significant liquidation, and recent dip-buying suggests gold could soon resume its upward trend.
Earlier in the week, U.S. President Donald Trump suggested progress in direct tariff negotiations. However, weekend headlines indicated little substantial improvement. Meanwhile, the U.S. dollar recorded its first weekly gain since March, making gold more expensive for overseas buyers.
Other precious metals also declined: silver fell 1.6% to $33.03 per ounce but still logged a third consecutive weekly gain; platinum slipped 0.5% to $965.53 per ounce; and palladium dropped 1.8% to $936.89 per ounce.
Oil Market:
Oil prices edged higher on Friday but posted a weekly loss due to oversupply concerns and uncertainty around tariff negotiations. Brent crude futures rose 32 cents to settle at $66.87 per barrel, while WTI crude climbed 23 cents to $63.02 per barrel. Brent and WTI fell 1.6% and 2.6% respectively for the week.
Ole Hansen, analyst at Saxo Bank, commented that ongoing trade tensions among major consumers and speculation that OPEC+ may accelerate output increases from June have capped near-term oil price gains.
Oil prices had earlier this month touched a four-year low, driven by demand worries and financial market volatility linked to tariffs. Several OPEC+ members have reportedly proposed accelerating production hikes for a second consecutive month starting in June.
Additionally, if the Russia-Ukraine conflict eases, an increase in Russian oil supplies could further pressure the market. Over the weekend, Russian President Vladimir Putin met with U.S. Middle East envoy Brett McGurk, discussing possibilities for resuming direct Russia-Ukraine negotiations. Meanwhile, Iran and the U.S. agreed to continue nuclear talks this week, though Iranian officials remain cautious about the prospects for a breakthrough.
Financial Market Data Copyright © 2025 AimStar myportfolio.
Data as of April 28, 2025, 11:00 AM.
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Monday, April 28
- Earnings releases: Welltower (WELL), Waste Management (WM), Cadence Design Systems (CDNS), Roper Technologies (ROP), Brown & Brown (BRO), Nucor (NUE)
Tuesday, April 29
- U.S.: Advanced trade balance (March), Advanced retail inventories (March), Advanced wholesale inventories (March), S&P Case-Shiller Home Price Index (February), Consumer Confidence Index (April), Job Openings and Labor Turnover Survey (April)
- Earnings releases: General Motors (GM), Visa (V), Coca-Cola, AstraZeneca (AZN), Novartis (NVS), HSBC Holdings (HSBC), Booking Holdings (BKNG), S&P Global (SPGI), Honeywell (HON), Pfizer (PFE), Spotify (SPOT), American Tower Corporation (AMT), Starbucks (SBUX), United Parcel Service (UPS), PayPal (PYPL)
Wednesday, April 30
- Canada: February GDP and March flash GDP estimate, Bank of Canada Summary of Deliberations for April rate decision
Canada: Hudson’s Bay Company binding proposal deadline - U.S.: ADP Employment Report (April), Q1 GDP, March Personal Consumption Expenditures (PCE), Q1 Employment Cost Index, Chicago Business Barometer (April), Pending Home Sales (March)
- Earnings releases: Microsoft (MSFT), Meta Platforms (META), UBS (UBS), Qualcomm (QCOM), Caterpillar (CAT), Canadian Pacific Kansas City Railway (TSX:CP)
Thursday, May 1
- Canada: Hudson’s Bay asset lease bid deadline
Earnings releases: Canadian National Railway (TSX:CNR), TC Energy (TSX:TRP) - U.S.: Initial Jobless Claims (week ending April 23), S&P Global Manufacturing PMI (April), Construction Spending (March), ISM Manufacturing PMI (April)
- Earnings releases: Apple (AAPL), Amazon (AMZN), Eli Lilly (LLY), Mastercard (MA), McDonald’s (MCD), Amgen (AMGN), MicroStrategy (MSTR), CVS Health (CVS), Airbnb (ABNB)
Friday, May 2
- U.S.: April Employment Report, March Factory Orders
- Earnings releases: ExxonMobil (XOM), Chevron (CVX), Shell (SHEL), Cigna (CI), Magna International (TSX:MG)
Published by Vikki Zhao
April 28, 2025 11:00 AM EST. 10 min read
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