Canada overrides tariffs: secret benefits for investors
A Fresh Take:
Canada Embraces a New Prime Minister in Mark Carney amid US Pressure
The Great White North is chucking psych one hundred to its Southern neighbor. On February 4, US Prez Donald Trump slapped a 25% tariff on Canadian steel and aluminum products. These duties have been in effect since March 4, with Trump threatening to double them unless Canada surrenders and becomes the 51st US state.
Sounds familiar? Well, much like a pesky hockey player wiping their glove on an opponent's face, this provocation isn't sitting well with Canadians. Millions are axing their US vacation plans, snubbing American goods, and even renaming black coffee to "Canadiano" – a jab at the Americano coffee of yore.
But Canadians aren't backing down. Instead, they're rallying behind their freshest Prime Minister since the Steve Miller Band had a pop hit – Mark Carney. An economist and former bigwig at the Bank of England, Carney was unanimously elected as Justin Trudeau's replacement by the Liberal Party on March 9. According to a poll by Ipsos, 42% of Canadians could vote for Carney and the Liberals in the April 28 elections – a political shift that hasn't happened in over thirty years, according to Ipsos CEO Darrell Bricker.
This change of guard signals Canadians' resolve not to cave into Trump's bullying. They also understand the dire consequences of the trade war, with 78% of Canadian exports going to the US and accounting for 36% of the country's GDP. As a result, they expect a 3.5% drop in GDP.
Yet, the Canadian stock market remains surprisingly unfazed. The S&P/TSX Index soared by 13.8% in March due to Canadian companies' resilience and protection against the US tariffs. Plus, a weaker Canadian dollar brings benefits during the trade war.
Canada, after all, isn't just a hockey-playing, maple syrup-drinking nation. It's a heavyweight in the global commodities market and the world's largest producer of zinc, uranium, and nickel – metals crucial for lithium-ion batteries. The mining sector contributes 8% to the country's GDP and makes up a quarter of their exports. Many of these mining companies have Canadian headquarters.
The US, however, isn't immune to Canada's commodities either. About 37% of US oil consumption comes from Canada, and Canada powers several US states, bolstering its trade position. It's a relationship that benefits both nations.
For companies like BQE Water in Vancouver, the tariff clash presents golden business opportunities. This water treatment specialist, which saw its 2024 revenue increase by 14% to CAD 19.7 million, is financially stable with low debt and cash reserves of CAD 10.9 million. Best of all, its stock is relatively undervalued, with a 2025 P/E ratio of 11.2.
Intrigued? Brush up on the factors propelling Canada's positive market outlook beyond BQE Water in the commodities sector report of the upcoming Euro am Sonntag issue.
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- The political change in Canada, with Mark Carney as the new Prime Minister, could significantly impact Canada's finance and business sectors, especially in the context of ongoing trade disputes with the US.
- Despite the ongoing trade tensions and potential economic impacts on General-News, the Canadian stock market, particularly companies like BQE Water, are presenting unique investing opportunities due to their financial stability and undervalued stocks.
- The relationship between Canada and the US extends beyond hockey and neighborly ties, as around 37% of US oil consumption comes from Canada, showing the importance of politics in shaping global trade and businesses.
