What I am doing about these Tariffs

Feb 2nd 2025

This post is going to be slightly different than my regular posts in that it is going to include my progression of thoughts and opinions. If you’ve had your head in the sand (no judgement here every once and awhile I do this to reset) I am referring to President Trump’s tariffs on Canada. At time of writing this section (February 2nd) they currently sit at 25% for most everything except energy which is 10%.

The main reason that was given is because of Fentanyl supposedly coming through Canadian / US borders from the Canadian side. My first instinct is that if anything I would have thought it would be the other way around. The president claims nothing has been done to improve the situation. Meanwhile here in Canada we have been sending drones, canine units and helicopters to support the border efforts.

Let’s for a minute assume the president is correct and we aren’t doing enough. What percentage of this trade does the Canadian side contribute? That’s the wild part in this article if you go based on what is seized Canada is 0.2% of what has been seized on the US Mexico border. JD Vance the Vice President has recently stated it is around 1%. To me this really doesn’t seem to justify 25% tariff but that doesn’t matter. This is the current situation and all we can do is use our best judgement.

In retaliation the Canadian government (as well as some provincial governments) are now applying tariffs to the US. This really has people scared and angry. Just this morning when I was in the No Frills there were many people flipping products over to see where it was made and I even heard one gentleman say we aren’t buying this one its from the US.

• I get the need to show strength but personally I feel like it is more of a bluff from our end as we have far less ability to hurt them than they do to us.

Current plan

Not much to talk about yet but I’m currently thinking wait and see for a few days. If there is a large correction I want to buy aggressively. This is mostly because of my regrets from not doing so in the fall of 2022. Seriously considering buying a 2 or 3x leveraged QQQ if there is a significant drop. I have been monitoring HQU since it is traded in CAD and if I pulled that trigger back in late October 2022 I would have a 220% return now.\

Feb 3rd 2025

Luckily or unluckily depending on your viewpoint I was extremely busy with work and did not get an opportunity to look at the stock market at open. In all honesty I likely wouldn’t have done much but at least I didn’t give myself the option to panic sell. By the time may day had settled down Trudeau and Trump had 2 calls resulting in a plan moving forward which involves the tariff decision to be punted for another month. Into the end of the day the majority of my positions have recovered but definitely not all of the way.

Thinking longer term I believe the same thing will happen in March, hopefully it won’t come right down to the wire but if it does perhaps there will be a quick swing trade in there.

Feb 4th 2025

Another day and another wild proposal by the president to the south. Today he announced his proposal for the USA to take over the Gaza strip, apparently without consulting anyone.

One would think at bare minimum the state department would have been involved or at least been given the heads up.

The general gist of his idea was that US military would occupy the area in order to disarm and remove any left over ordnance. Once that was done the great rebuilding would begin.

Keeping my thoughts close to the subject of this blog I believe this simply reinforces the quick, half baked, overly forceful ideas are simply a tactic to get progress towards what he actually wants.

In psychology this is referred to as the door-in-the-face technique and it is surprisingly effective.

February 5th and 6th 2025

Trump stayed a little more focussed on overseas than he did on Canada. Except perhaps talks on the arctic pass.

The markets seemed to calm and we even saw a 1% gain on the TSX60 between Tuesdays close on the 4th and Thursdays close.

February 7th

Trudeau hosted a summit in Toronto today discussing stemming the movement on fentanyl and general border security.

While I’m glad that is being worked on the most interesting part of the summit for me was the discussion on how to make interprovincial trade less challenging. The simple fact that in most cases it is easier for us to trade with the US over other provinces astounds me.

Another interesting takeaway from all of this is that 58% of polled residents of Quebec now say they are proudly Canadian (up from 45% in December 2024)

Summary

We are definitely living in some interesting times but hey that could apply to essentially the last 7 years.

• Hardship in 2018 due to inflation and budget deficits.
• COVID crash in 2020
• Absurd helicopter money into 2022
• Crash during 2022 (Jan 1st 2022 -> October 14 2022) the S&P 500 was down almost 25% (TSX60 about 15%)
• Crazy rallies since October 2022 until now.

One thing is for certain, politicians will be politicians and we has individual investors simply need to stay as smart individual investors.

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