Trump agrees to pause tariffs on Canada and Mexico but not on China
Published On Feb 3, 2025, 10:39 PM
President Trump has temporarily postponed the imposition of 25% tariffs on Canada and Mexico for 30 days, easing tensions that could have led to a trade war. The agreement includes border security measures from both countries to address issues like drug trafficking. Meanwhile, a 10% tariff on Chinese imports is still set to take effect. Economists warn that tariffs could increase prices on a variety of goods. The trade environment remains uncertain, creating anxiety among businesses and consumers in both the US and Canada.
Stock Forecasts
XLC
Neutral
The temporary relief from tariffs may stabilize stock prices in Canada and the US; however, the ongoing threat of tariffs from the US, particularly on China, continues to create market anxiety. Investors should watch companies exposed to international trade and commodities closely, as they may be affected by fluctuating tariffs and trade relationships.
XLY
Negative
While the suspension of tariffs provides short-term relief, the ongoing trade tensions and the potential for future tariffs may negatively impact stocks of companies reliant on cross-border trade and manufacturing. Investors should prepare for volatility, particularly in sectors like automotive and consumer goods.
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