On day one of U.S. President Donald Trump’s tariffs on Canadian goods, investors are worried but not yet ready to make changes to their U.S. investment holdings.
“We have a very small percentage of clients that are willing to sacrifice returns for their conviction,” said Francis Gingras Roy, a Manulife Wealth financial advisor in Dorval, Que. “Most people will try to maximize their return.”
This is contrary to Canadian consumers’ response. Two-thirds have cut down on buying U.S. goods and 70% increased their purchases of Canadian goods, according to a Leger survey released Tuesday.
More than four in five Canadians (83%) support retaliatory tariffs.
Prime Minister Justin Trudeau hit back with an immediate 25% tariff on $30 billion worth of U.S. goods including whiskey, pantyhose and refrigerators. A further $125 billion worth of goods will be subject to tariffs in 21 days if the trade war continues.
New clients are nervous about committing new money and a long-term plan, said Larry Short, a senior portfolio manager with Short Financial, with offices in St. John’s and Toronto.
Likewise, Roy received calls and emails from anxious clients as markets dipped in the morning.
“People are scared,” he said. “They’re asking if we should make any changes in the strategy and the portfolios.”
By afternoon however, the major North American exchanges were on a correction path.
“This morning [and] this afternoon were completely different worlds,” Roy said. “Never make any changes based on emotions and short-term volatility.”
One client asked Roy if she should stop buying U.S. stocks such as Apple, thinking its stock price might fall as Canadians avoid American products. Roy disagreed. Canadians will keep eating at McDonald’s, shopping at Walmart and ordering products through Amazon because it’s convenient, he said.
“People aren’t willing to sacrifice that level of comfort for their conviction, so I don’t think there’s a risk for U.S. equities.”
Some investors may even bet on America. The Canadian dollar is falling, and U.S. companies will likely benefit from the tariffs, Short said.
While some stocks tumble in turbulence, others boom, Short said. For example, consumer staples and value supermarkets tend to do well in downturns.
Investors should avoid investing in affected industries such as Canadian oil and gas and auto parts manufacturing as tariffs raise production costs and increase prices, he added.
Canada will be in a recession if tariffs persist, Short said. But markets have experienced above-average returns in the last year so there’s a cushion to absorb some of the downturn.
“Advisors really cut their teeth and earn their living during times like this,” Short said. “Advisors should be calling their clients [and] getting as much information to them as they possibly can to prevent clients from making monumental panic decisions.”
The online Leger survey polled 1,534 Canadians and 1,007 Americans between Feb. 21 and 25, 2025.