Canada's conservative movement could gain significant momentum in this election year as Prime Minister Justin Trudeau announced his resignation amid mounting pressure from domestic critics and tariff threats from U.S. President-elect Donald Trump. 

Meanwhile, American conservative strategist Matt Shupe has been leading efforts in Calgary, training activists, consultants and volunteers on how to build winning campaigns, positioning the movement for potential gains in the post-Trudeau era.

"From my own experience in Canada, I would describe it as California on steroids," Shupe, 39, who most recently was the spokesperson for ex-MLB star Steve Garvey's mayoral campaign in Los Angeles, told Fox News Digital in an interview.

TRUMP SAYS US SUBSIDIES TO CANADA MAKE ‘NO SENSE,’ SUGGESTS CANADIANS WANT ‘TO BECOME THE 51ST STATE’

Shupe, who began political consulting 10 years ago and founded Praetorian Services, said Trudeau's resignation is reminiscent of President Biden's exit from the 2024 presidential race. 

"They took a page out of the DNC playbook with what they did with Biden," Shupe said of Canada's liberal flank. "If American politics serves as any sort of analog, that didn't work for Kamala."

Shupe noted that his conversations with Canadians suggest progressive policies have pushed even many liberals toward the center. Working with the Leadership Institute, a conservative mentorship and training organization, Shupe said leaders plan to apply lessons and data from U.S. elections to strengthen the prospects of Canadian conservatives.

"The [conservative] movement has primarily attracted young people because they don't have the prospects," he said. "They're taxed so heavily there, the cost of living is so high compared to their income, and the cost of owning a home is so hard. Whenever I go there and talk to people my age or younger, even a little older, they all have the same complaints as people I talk to in San Francisco."

Meanwhile, Canada's firebrand conservative candidate Pierre Poilievre, who could become the nation's next leader, has been compared to the likes of President-Elect Donald Trump, vowing to crack down on immigration, inflation and the budget deficit.

"I think you're seeing that with the left in Canada and in the United States, is that they just took everything too far, and they hit a threshold with people that it's just gone too far," he said.

CANADA’S TRUDEAU ANNOUNCES RESIGNATION FOLLOWING PARTY PRESSURE AMID CRITICISMS OF TRUMP, BUDGET HANDLING

Poilievre, whose Conservative Party has nearly three times the support of committed voters (47% compared to 18% for the Liberals) in this year’s general election, was first elected to the House of Commons in 2004. The 45-year-old Calgary native became leader of the Canadian Conservatives in 2022 and has seen his party grow in popularity as Canadians have grown tired of 53-year-old Trudeau, whose Liberals formed the government in 2015.

The incoming Trump administration will likely soon deal with a Poilievre government as the Conservatives are poised to win the next Canadian election, which could come as early as this spring. When the House of Commons resumes sitting on March 24, the opposition parties are likely to defeat the minority Liberal government in a vote of no-confidence, which would trigger a national vote that presently favors the Conservatives.

In his Peterson interview, Poilievre acknowledged that Trump, who has proposed a 25% tariff against Canadian imports, "negotiates very aggressively, and he likes to win." But as prime minister, the Conservative leader said he would seek "a great deal that will make both countries safer, richer and stronger."

TRUMP REACTS TO TRUDEAU RESIGNATION: ‘MANY PEOPLE IN CANADA LOVE BEING THE 51ST STATE’

Trudeau, after nearly a decade in power, has faced months of declining approval ratings amid growing frustration over rising inflation and the soaring cost of living.

"I intend to resign as party leader, as prime minister, after the party selects its next leader through a robust nationwide competitive process," Trudeau told reporters Monday. "Last night, I asked the president of the Liberal Party to begin that process. This country deserves a real choice in the next election, and it is become clear to me that if I'm having to fight internal battles, I cannot be the best option in that election."

"As you all know, I am a fighter, and I'm not someone who backs away from a fight. Particularly when the fight is as important as this one is. But I have always been driven by my love for Canada, by my desire to serve Canadians and by what is in the best interests of Canadians, and Canadians deserve a real choice in the next election," Trudeau added. "And it has become obvious to me with the internal battles that I cannot be the one to carry the liberal standard into the next election."

Fox News Digital's Christopher Guly contributed to this report.

President-elect Trump said on Tuesday that negotiating away the Panama Canal was a "very big mistake" by former President Jimmy Carter – ahead of Carter's state funeral later this week.

Trump said at a press conference that he believes the canal, which he would like the the U.S. to reclaim, is why Carter lost the 1980 presidential election to Ronald Reagan, who also opposed the treaty Carter negotiated to hand over the canal.

"It's a bad part of the Carter legacy," Trump said.

"He was a good man. I knew him a little bit, and he was a very fine person. But that was a big mistake."

LIVE UPDATES: JIMMY CARTER REMEMBRANCES, FUNERAL SERVICES

"Giving the Panama Canal to Panama was a very big mistake. We lost 38,000 people. It cost us the equivalent of a trillion dollars, maybe more... They say it was the most expensive structure… ever built. And giving that away was a horrible thing. And I believe that's why Jimmy Carter lost the election, even more so than the hostages," he said.

Speaking in Palm Beach, Florida, Trump lamented the fact Carter purportedly "gave" the canal lands back to the Panamanians "for $1." According to reports, no part of the treaty mentioned a $1 sale.

"I thought [giving the canal back] was a terrible thing to do," Trump said.

When reporters pressed Trump on criticizing Carter on the day of his Washington wake, the president-elect said he was a "very fine person" but that his politics left something to be desired.

Trump has also sparred verbally with Panamanian President Jose Raul Mulino about his plans for the canal.

However, more than a century ago, another Republican – Theodore Roosevelt – celebrated the way the United States spearheaded the canal project in part through some diplomatic maneuvering.

HOW CARTER TRANSFORMED THE AIRLINE INDUSTRY

In the early 1900s, as the Colombian Senate balked at a treaty favoring U.S. control, Panama was in the process of declaring its independence from Bogota – and America quickly recognized the new nation and effectively circumvented the Colombians.

In 1903, President Roosevelt boasted of the accomplishment.

"Fortunately, the crisis came at a period when I could act unhampered [by Congress]. Accordingly, I took the Isthmus, started the canal and then left Congress not to debate the canal, but to debate me," he said. 

Trump’s plans to retake the canal have earned him praise from otherwise regular critics.

Meghan McCain, daughter of the late Sen. John McCain – with whom Trump often sparred – backed the man she otherwise tends to critique.

"Trump is right about the Panama Canal. This is very personal – my dad was born in the Panama Canal Zone."

The elder McCain was born in 1936 at the then-Coco Solo U.S. Navy installation – as a U.S. citizen since the canal zone was controlled by Americans.

The late Sen. Strom Thurmond of South Carolina also expressed reservations about canal negotiations in the 1970s.

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In a letter to then-President Ford, Thurmond warned the Panamanians were cozying up to the Communist Cuban government, and that "any action on the part of the United States that indicates the slightest position of weakness or a willingness to accommodate anti-American sentiment in Panama, would result in many other Latin American countries moving in the same leftward direction."

Thurmond led 35 senators in crafting a resolution opposing what he called the surrender of U.S. sovereignty in the PCZ.

"Any loss of control of the Canal would be extremely detrimental to our vital interests, especially in Latin America. We should make it clear that U.S. vital interests there are not negotiable."

Carter's negotiations led to Panama taking full control of the canal by 1999. His other major diplomatic negotation – peace accords between Egypt and Israel – also remain intact today.

• Russian President Vladimir Putin maintains alliances despite sanctions, keeping Russia's economy afloat.
• Countries like India and Vietnam balance relations with both Russia and the West.
• These alliances are crucial for Russia to navigate trade restrictions and economic challenges.

Russian President Vladimir Putin may be heavily sanctioned and running a country that faces sweeping trade restrictions, but he still has friends.

Russia's friends — or frenemies — aren't all pariah states or US rivals. Some of them, like India and Vietnam, have good relations with the West, too.

"Putin is eyeing strategic swing nations like India, which opposes China and trades with Russia," Sean McFate, a military strategist and author of "The New Rules of War," told Business Insider in September.

Moscow is also trying to emerge from diplomatic isolation, looking to forge strategic relationships beyond autocratic partners like China, North Korea, and Iran, he said.

Still, among the nations Putin has been cozying up to, some are more important to Russia because they keep trade humming.

These are five key countries for Russia's sanctions-skirting economy:

1. China

It's no secret that China and Russia have a special relationship.

Not only did Beijing and Moscow declare their "no limits" friendship in a joint statement on February 4, 2022, when Putin visited China for the Beijing Winter Olympics, but the Russian leader wasted no time buttering up China after his election victory in March this year.

China was the first country Putin visited after he was inaugurated for his fifth term as president.

As authoritarian regimes, Russia and China have close historical and political roots. Beijing's rivalry with the US and the West also plays right into Russia's script.

China has consistently ranked as one of Russia's most important trading partners since the mid-2000s.

Last year, China's trade with Russia jumped 26%, to a record $240 billion.

2. India

While China's ties with Russia are based on their antagonistic relationships with the West, Moscow's relationship with India is more nuanced.

New Delhi has been getting closer to the US in recent years. The world's largest democracy, India is a member of the Quadrilateral Security Dialogue, a security pact that includes the US, Japan, and Australia.

It's also a top supply chain hotspot alternative to China.

At the same time, India has become one of Russia's top trading partners after Moscow pivoted most trade away from Europe, following sweeping sanctions.

Russia's relationship with India goes back to the Cold War, and trade between the two countries has grown since Russia started the war in Ukraine. India is a major buyer of Russian oil and Russia is India's biggest arms supplier.

In June, Indian Prime Minister Narendra Modi visited Russia and met Putin, showing New Delhi isn't afraid to forge its own path in diplomacy.

3. Brazil

Russia and Brazil have what each other needs, making for a mutually beneficial relationship.

Russia exports oil and fertilizers to Brazil and Brazil exports agriculture products — including soybeans, coffee, and meat — to Russia.

In 2023, bilateral trade between Russia and Brazil reached $8.4 billion, off a record high of nearly $10 billion in 2022.

In recent years, Brazil has become important to Russia as part of the BRICS group, which Putin sees as a counterweight to the West-led world order.

Like Putin, Brazilian President Luiz Inacio Lula da Silva backs a multipolar world and has championed an alternative to the almighty US dollar in global trade and payments.

"Every night I ask myself why all countries have to base their trade on the dollar," the Brazilian leader said in April 2023.

4. Turkey

Putin and Turkish President Recep Tayyip Erdogan are both longtime strongmen leaders.

Russia is one of Turkey's top trading partners, so there are compelling reasons why Ankara would want to deepen ties with Russia.

Just half a year into Russia's invasion of Ukraine, Erdogan took up Putin's offer to create a "natural gas hub" as Europe weaned itself off natural gas imports from Russia.

Since the war's outset, Turkey — a NATO member — has been positioning itself as an intermediary between the West and Moscow, brokering grain export deals between Russia and Ukraine and offering to host peace talks between the two sides.

Turkey has also expressed interest in joining BRICS — which Russia is a member of — and has been given partner country status.

5. Kazakhstan

Former Soviet republics, Russia and Kazakhstan are close trade partners and their economic relationship has only deepened amid the Ukraine war.

In 2024, trade turnover between the two countries reached $27 billion — nearly 40% higher than the $19.7 billion in 2019.

Kazakhstan has come under scrutiny for its role as a key hub of goods to and from Russia, including parallel imports. The Kazakhstan government has been cracking down on such deals, but some trade persists.

In August, Serik Zhumangarin, Kazakhstan's deputy prime minister and its minister of trade and integration, told Bloomberg that some sanctions against Russia have affected the central Asian country's economy.

Kazakhstan "won't blindly follow the sanctions" if it means major local companies are affected, Zhumangarin said.

• Russia's railway industry is in the midst of a big downturn, according to one Russian research firm.
• Investment in Russia's railways is being slashed by nearly a third next year, TASS reported.
• It complicates Russia's trade with China, which has relied partly on rail transport.

One of Russia's key trading channels with China is facing serious snags. That's a result of burdens stemming from Russia's war-driven economy, which have fueled a big slowdown in the nation's rail industry — a vital means of trade between Moscow and Beijing.

Russia's rail industry is in its worst slowdown since the Great Financial Crisis, with the downtrend "still going strong," according to an analysis from the Russian research firm MMI Research. Freight volume transported by Russian Railways, Russia's state-owned rail system, slumped 5% in the first 11 months of 2024 compared with the same period last year, according to MMI data cited by Bloomberg.

The slowdown is driven in part by Russia's need to ship war-related materials, which have worsened supply bottlenecks and slowed the trade of key commodities, like coal and aluminum, the outlet reported.

Investment in Russia's railroads is also being slashed, partly due to high interest rates in the nation, according to a report from the state-owned news agency TASS. Russian Railways said it would earmark just 890 billion rubles, or $8.5 billion, for its investment program next year, a 30% cut from investment in 2024, TASS reported.

The firm is mulling whether it should cut investment by another third through the end of the decade, the Russian outlet Kommersant reported. Russian Railways did not immediately respond to a request for comment from Business Insider.

The changes spell bad news for Russia's trade with China, which has leaned on railway transport amid Western sanctions. Russia poured billions into its railways earlier this year partly to accommodate its increased trade with China.

The changes also speak to the growing costs of Russia's war against Ukraine, which have produced myriad economic problems for Moscow.

Russia's central bank raised interest rates to a record 21% earlier this year in an effort to lower sky-high inflation. The bank kept interest rates level in their policy decision last week, due to concerns about "excessive cooling" in Russia's wartime economy, according to the nation's top central banker.

• The Federal Reserve cut interest rates in its final decision of the year.
• It also penciled in two interest-rate cuts in 2025.
• Still, Powell said that Trump's proposed trade policies pose economic uncertainty.

President-elect Donald Trump's potential trade policies could change the Federal Reserve's plans in the coming year.

On Wednesday, the Federal Open Market Committee announced its third consecutive interest-rate cut of the year, lowering rates by 25 basis points. Alongside the rate cut announcement, the Federal Reserve's quarterly Summary of Economic Projections also penciled in two interest-rate cuts for 2025, based on the median prediction from voting Fed members.

Markets took a dive after the Fed announcement, with the Dow Jones Industrial Average closing down over 1,100 points, or about 2.6%.

Fed chair Jerome Powell said during the Wednesday press conference that the decision to cut rates in December was "a closer call" but ultimately "the best decision" to achieve the Fed's dual mandate of maximum employment and price stability.

"I feel very good about where the economy is. Honestly, I'm very optimistic about the economy, and we're in a really good place. Our policy is in a really good place. I expect another good year next year," Powell said.

However, Powell said Trump's proposed tariff plans pose more uncertainty to the US economy in the coming year.

The president-elect has suggested he would impose broad tariffs on imports from key trading partners with the US, including China, Mexico, and Canada, which could lead to higher prices for imported goods.

At this point, Powell said there is too much uncertainty around Trump's trade plans to make any concrete predictions about next year's policy decisions at this point.

"We just don't know really very much at all about the actual policy, so it's very premature to try to make any kind of conclusion," Powell said. "We don't know what will be tariffed, from what countries, for how long, in what size. We don't know whether there'll be retaliatory tariffs. We don't know what the transmission of any of that will be into consumer prices."

Additionally, Powell said some FOMC members did consider fiscal policy, like tariffs, in their economic predictions, showing how the Fed is facing a range of uncertain scenarios in 2025.

He said that once Trump unveils his policies, the Fed would consider any necessary changes to its policy, but "we're just not at that stage."

Over the past year, Powell has reiterated that the Fed should move more cautiously instead of risking cutting rates prematurely and having to course correct later on. That's still the Fed's outlook going into the new year as the central bank continues its goal of reaching 2% inflation.

Amid economic progress over the past year, Powell said that inflation is coming down at a slower pace than the Fed would prefer. The consumer price index, which measures inflation, rose 2.7% year-over-year in November, a slight uptick from the 2.6% reading in October.

"When the path is uncertain, you go a little bit slower," Powell said. "It's not unlike driving on a foggy night or walking into a dark room full of furniture, you just slow down."

• Container ships are avoiding the threat of Houthi attacks in the Red Sea, The New York Times reported.
• Sailing around Africa extends journeys by up to 10 days and adds significant to fuel costs.
• Sending US and EU warships to the region has done little to improve the situation for shipping companies.

Some cargo ships are extending their journeys by up to 10 days and thousands of miles to avoid Houthi attacks in the Red Sea, The New York Times reported on Wednesday.

More than a year ago, Houthi rebels based in Yemen began targeting ships and vessels in the Red Sea, which they said was in response to Israel's escalations in Gaza.

However, the rebels have also attacked ships with no obvious connection to the Israel-Hamas conflict.

Maritime historian Salvatore Mercogliano told the Times the situation was one of the most significant challenges shipping had faced for some time.

A report by the Defense Intelligence Agency said that at least 65 countries' trade interests had been affected by Houthi attacks on commercial shipping as of April.

There have been about 130 such incidents involving commercial ships since October 2023, per figures collated by the Armed Conflict Location and Event Data Project.

Diverting ships around Africa's Cape of Good Hope adds thousands of nautical miles, up to two weeks of transit time, and about $1 million in fuel costs for each voyage, per the report.

It also said container shipping through Red Sea, which typically accounts for about 10% to 15% of international maritime trade, had declined by about 90% between December 2023 and February.

The US and EU have sent warships to the Red Sea and Gulf of Aden to prevent Houthi attacks, but the move has had little impact.

According to Portwatch, a database run by the IMF and Oxford University, the average number of container ships passing through the Red Sea a week as of December 1 was 26, down from 73 the same time last year.

As well as longer journey times and higher costs, the management consultancy Inverto estimated that an additional 14 million tonnes of carbon dioxide had been emitted since the crisis began.

• China's exports grew 6.7% in November, hitting $312 billion, despite economic challenges.
• The growth reverses last year's decline, driven by strong global demand and frontloaded orders.
• Beijing is planning proactive fiscal policies amid tariff threats from President-elect Trump.

It's been a difficult year for China's economy, but the country is still expected to hit its GDP growth target, thanks to strong global demand for its exports.

In November, China's exports grew 6.7% from a year ago to $312 billion — the highest level since September 2022, per official data released on Tuesday.

Some of the exports in November could have been from US importers who were frontloading to avoid potential higher tariffs in President-elect Donald Trump's second term, BofA Securities analysts wrote on Tuesday. This activity could hold up in the near term, they added.

The robust November import adds to a 5.1% growth in exports through the first 10 months of this year and reversed a 4.6% decline in exports last year, presenting the "biggest upside surprise" for China's economy in 2024, wrote Lynn Song, the Greater China economist for ING, in a note last week.

However, given that China's exports in November were strong due to stockpiling, its upside could be short-lived — especially as global demand slows.

"We are likely going to see a payback of such frontloading in 2Q-3Q next year, aggravating the potential impact of tariff increases," wrote the BofA Securities analysts.

As it was, China's November imports — though robust — missed the 8.5% increase anticipated by economists in a Reuters poll. The growth was also lower than October's 12.7% rise.

And it could get worse for the world's second-largest economy amid US President-elect Donald Trump's tariff threats.

Trump has pledged to slap 60% tariffs on all imports from China and an additional 10% on China, citing its role in the fentanyl trade.

China's consumer demand also isn't holding up. Imports contracted 3.9% from a year ago, as Chinese people tighten their belts and trade down for cheaper purchases.

Beijing gets ready for Trump 2.0

Having dealt with Trump's first presidency — during which the US and China started its trade war — Beijing is getting ready for Trump 2.0.

The Chinese leadership is holding its Central Economic Work Conference this week.

The meeting comes just after a Politburo meeting on Monday, during which China's top leadership pledged "a more proactive fiscal policy and a moderately loose monetary policy" ahead, according to Xinhua state news agency.

Xinhua added that China will also step up "unconventional" counter-cyclical adjustments and boost domestic demand and consumption.

"The strong tone on policy stance suggests that Beijing is very determined to stabilize growth and will step up fiscal spending next year," wrote Ting Lu, Nomura's chief China economist, on Tuesday.

Markets viewed the Politburo's plans positively, with China's stocks and bonds rallying on Monday. Optimism faded on Tuesday, with markets relatively muted.

"We believe China is not in a typical downcycle, we think Beijing needs to do much more beyond increasing fiscal spending and printing money to achieve a real recovery," wrote Lu.

China has been pulling out moves to boost its flagging economy this year, including aggressive stimulus measures in late September that sent the stock market surging 8.5% in one day.

China's benchmark CSI300 and Hong Kong's Hang Seng Index are both about 20% higher this year to date but are far below their peaks in early 2021.

President-elect Trump has tapped Andrew Ferguson to serve as chair of the Federal Trade Commission, the anti-trust agency of which he already serves as a commissioner. 

"Andrew has a proven record of standing up to Big Tech censorship, and protecting Freedom of Speech in our Great Country," Trump said in a Tuesday statement posted to his Truth Social network. "Andrew will be the most America First, and pro-innovation FTC Chair in our Country’s History."

"Andrew will be the most America First, and pro-innovation FTC Chair in our Country’s History," he added.

LARA TRUMP ANNOUNCES SHE IS STEPPING DOWN AS RNC CO-CHAIR AMIDST TALK SHE MAY BE UP FOR FLORIDA SENATE SEAT

Ferguson is one of two Republican commissioners on the five-member panel chaired by Lina Khan. Ferguson, who also served as the solicitor general of Virginia, was appointed to the commission by President Biden and joined the FTC on April 2. 

The FTC is charged with acting as an anti-trust and consumer protection agency. 

The replacement of Khan likely means that the FTC will operate with a lighter touch when it comes to antitrust enforcement. The new chair is expected to appoint new directors of the FTC's antitrust and consumer protection divisions.

Khan became a lightning rod for Wall Street and Silicon Valley by blocking billions of dollars' worth of corporate acquisitions and suing Amazon and Meta while alleging anticompetitive behavior.

Under Khan, the FTC blocked a proposed merger between Korger and Albertsons, two large supermarket chains which forged a $24.6 billion deal in 2022. 

TRUMP'S TARIFF THREATS GO BEYOND 'TRADE AGREEMENT' TO ADVANCE AMERICAN INTERESTS: EXPERT

On Tuesday, a judge halted the merger after the FTC filed a lawsuit to block the move, alleging it would lead to high prices and lower wages for workers. 

Ferguson's experience could signal continued scrutiny of large tech companies. 

In a statement earlier this month, he called for the prosecution of "unlawful collision" between online platforms that could limit "Americans’ ability to exchange ideas freely and openly."

"In particular, we must vigorously enforce the antitrust laws against any platforms found to be unlawfully limiting Americans’ ability to exchange ideas freely and openly," he wrote. 

The Associated Press contributed to this report. 

• Donald Trump's latest tariff threat is to levy 100% duties on goods from the nine BRICS countries.
• He framed the threat as a bargaining chip, warning BRICS against competing with the US dollar.
• The US imported billions of dollars of goods from BRICS in 2023, including apparel and electronics.

President-elect Donald Trump's latest trade threat on nine countries could affect key US imports, risking price increases if the tariffs are implemented.

In a Saturday post on Truth Social, Trump targeted the BRICS group, which comprises nine countries: Brazil, Russia, India, China, South Africa, Ethiopia, Egypt, Iran, and the United Arab Emirates. All have pushed to curb the global dominance of the US dollar. He wrote that he would impose a 100% tariff on those countries' goods unless they committed to not creating another currency that competes with the dollar.

"There is no chance that the BRICS will replace the U.S. Dollar in International Trade, and any Country that tries should wave goodbye to America," Trump wrote.

Business Insider looked at the top goods the US imports from BRICS nations, including medicine, apparel, and electronics. While Trump appears to be using the tariff threats as a negotiating tool and could choose not to implement them at the scale he's proposing, the top imports from the targeted countries could see prices increase even with smaller tariffs.

Census Bureau trade data showed that in 2023, the BRICS nations together accounted for about $578 billion in US imports. China was responsible for the lion's share of that trade, with about $427 billion.

In 2023, the US imported $66.7 billion in cellphones and other household goods from China, $37.4 billion in computers, and $32 billion in toys, games, and sporting goods.

The US imported $151 billion in goods from the remaining eight BRICS nations, including over $11 billion in pharmaceutical preparations, followed by nearly $9 billion in gem diamonds, $6.3 billion in crude oil, and $6.1 billion in cotton apparel and household goods. India accounted for much of the imports from BRICS nations other than China.

Trump is targeting this group because some BRICS leaders have previously suggested acting to reduce their countries' reliance on the US dollar. Last year, Brazilian President Luiz Inácio Lula da Silva proposed creating a common currency among the BRICS nations.

The tariff threat on BRICS came just days after Trump said he would impose a 25% tariff on imports from Mexico and Canada that would remain in effect "until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!" He also warned of a 10% tariff on imports from China on top of any additional tariffs put in place on the country.

Russia has already responded to Trump's tariff threat. The Kremlin spokesperson Dmitry Peskov told reporters on Monday that if the US used "economic force to compel countries to use the dollar," it would empower countries to shift to other currencies for international trade.

Some companies, including Walmart and Columbia Sportswear, have already said they are preparing to increase prices should Trump implement tariffs on key trading partners.

The Trump team did not immediately respond to a request for comment on the impact of Trump's tariff threats on prices. Trump has previously said tariffs will not hurt Americans, misleadingly calling them "a tax on another country" (tariffs imposed by the US are paid by US importers).

During Trump's first term, he threatened tariffs against Mexico as a response to illegal immigration over the southern US border but later withdrew the plan. Sen. Bill Hagerty told NBC News on Sunday that trade had long been used as a "strategic tool," and he said he supported Trump using tariffs as leverage to achieve his priorities.

"We need to take a very hard look at countries that don't have our best interests at heart, countries that are allowing our borders to be violated," Hagerty said, "and use those tariffs as a tool to achieve our ends."

President-elect Trump suggested to Canadian Prime Minister Justin Trudeau last week that if a tariff for failing to address trade and immigration issues would kill the neighbor to the north’s economy, maybe it should become the 51st state, sources told Fox News.

Last Friday, Trudeau flew to Mar-a-Lago unannounced after Trump threatened to impose sweeping tariffs on Canadian products. Specifically, Trump is threatening to impose 25% tariffs on Canada and Mexico over their failures to curb the flow of illegal immigrants and illicit drugs from those countries into the U.S.

Now, new details are beginning to emerge about the meeting between the two men, which Trump called "very productive."

Before nibbling on crab cocktail and slurping down oysters, the issues of tariffs, border security and trade deficits were front and center.

TRUMP BOASTS OF ‘VERY PRODUCTIVE MEETING’ WITH CANADIAN PM TRUDEAU AT MAR-A-LAGO

According to two people at the table who heard the discussion, Trump, while cordial and welcoming, was very direct when it came to what he wants from his counterpart to the North.

Paraphrasing the discussion, Trump told Trudeau that Canada has failed the U.S. border by allowing large amounts of drugs and people across the border, including illegal immigrants from over 70 different countries.

Sources say Trump became more animated when it came to the U.S. trade deficit with Canada, which he estimated to be more than $100 billion.

MUSK, STALLONE AMONG STAR-STUDDED NAMES PARTYING AT TRUMP'S MAR-A-LAGO CLUB FOR THANKSGIVING

The president-elect told the prime minister if Canada cannot fix the border issues and trade deficit, he will levy a 25% tariff on all Canadian goods on day one when he returns to office.

Trudeau told Trump he cannot levy the tariff because it would kill the Canadian economy completely. Trump replied – asking, so your country can't survive unless it's ripping off the U.S. to the tune of $100 billion? 

Trump then suggested to Trudeau that Canada become the 51st state, which caused the prime minister and others to laugh nervously, sources told Fox News.

MEXICAN PRESIDENT MIGHT BE CHANGING VIEW ON US AS TRUMP WIN SENDS WARNING TO RULING SOCIALISTS 

But he continued, telling Trudeau that prime minister is a better title, though he could still be governor of the 51st state.

Sources told Fox News someone at the table chimed in and advised Trump that Canada would be a very liberal state, which received even more laughter. Trump suggested that Canada could possibly become two states: a conservative and a liberal one.

He told Trudeau that if he cannot handle his list of demands without ripping the U.S. off in trade, maybe Canada should really become a state or two and Trudeau could become a governor.

While sources say the exchange got many laughs, Trump delivered the message that he expected change by January 20.

The nearly three-hour conversation continued about various other topics, and at the end, the Canadian guests called the dinner "very friendly and very positive," though no reference was made about becoming the 51st state.

Fox News Digital has reached out to both the Trump camp and Trudeau’s team about the statements, though neither immediately responded.

• The industry's biggest names were up despite choppy markets following Donald Trump's victory.
• Balyasny led the way among multistrategy firms, posting a 3.9% monthly gain.
• Firms like Citadel and Schonfeld continue to build on a strong year of returns.

The biggest names in hedge funds ended an up-and-down month in markets in the black.

Multistrategy managers overcame the volatility surrounding Donald Trump's electoral victory — when markets initially skyrocketed but then sold off briefly before rebounding — with firms like Balyasny, Schonfeld, and Citadel posting strong returns for the month.

Balyasny led the way among its peers with a 3.9% gain in November to bring the Chicago-based manager's 2024 returns to 11.6%, a person close to the manager confirmed.

Schonfeld meanwhile continued its strong streak for the year, returning 1.8% in its flagship fund. The New York-based manager is up 17.2% for the year, a person close to the firm said. Ken Griffin's Citadel was also up 1.8% last month in its Wellington fund, while Izzy Englander's Millennium made 2.2%.

The billionaires' firms are up 13.2% and 12.5%, respectively, on the year. Bloomberg previously reported on the firms' November returns.

While multistrategy managers' returns were dwarfed by those of macro managers like Rokos and Discovery Capital that took big swings on Trump's victory, their biggest selling point — steadiness in turbulent markets — was proven true in November.

See below for more performance data. Additional firms will be added as their numbers are learned. The managers declined to comment or did not immediately respond to requests for comment.

• President-elect Donald Trump has threatened to slap tariffs on goods from Mexico, Canada, and China.
• Tariffs raise money but may also affect prices and employment, and they can lead to trade wars.
• Here's a guide to tariffs, including who pays them, how they work, and how they affect the economy.

Tariffs are back in the spotlight after President-elect Donald Trump pledged to impose 25% tariffs on goods from Mexico and Canada and an additional 10% duty on goods from China, unless those countries stop the flow of illegal immigration and narcotics into the US.

Trump's tariff threat could be a negotiating ploy to win better terms with America's three biggest trading partners. But if the tariffs are imposed, they could affect prices, employment, and the broader US economy — especially given the risk that China, Canada, and Mexico may retaliate with tariffs, triggering a trade war.

Here's what you should know about tariffs and why they matter.

What are tariffs?

A tariff is effectively a government tax specifically levied on foreign goods imported into a country.

Tariffs date back more than 200 years and were historically used by authorities to raise money. The US government collected most of its revenue from tariffs before introducing an income tax in the early 1900s.

Authorities now use tariffs primarily to protect domestic industries from foreign competition and punish trading partners for bad behavior.

There are four types of tariffs:

• An ad valorem tariff is calculated based on the value of the good. If an imported product is worth $10 and the tariff is 10%, the importer has to pay $1.
• A specific tariff is imposed on a per-unit basis, so the value of the item doesn't matter. An importer might have to pay $1 for every pound of cocoa beans it brings into the country, whether it brings in 10 bags or 1,000.
• A compound tariff combines elements of ad valorem and specific tariffs. The tariff on an imported item could be $1 per pound or 5% of its value, depending on which generates more revenue.
• A mixed tariff applies both an ad valorem and a specific tariff, meaning an importer might have to pay $5 a pound and 10% of its value as well.

Who pays tariffs? How do they work?

The news that Trump threatened Canada with tariffs, along with Mexico and China, has made it important to understand who pays tariffs and how they work.

In the US, the simple answer is that the person or business importing the tariffed product into the US pays the tariff, and the money is paid to the US Treasury.

For example, if General Motors imports parts from its factories in Mexico and assembles its cars in the US, it would have to pay tariffs to bring in those parts.

Customs and Border Protection agents collect tariffs at 328 ports of entry, including docks, airports, and border crossings.

How do tariffs affect prices and the economy?

Tariffs raise costs for importers, and to protect their profit margins, importers typically pass on those costs by charging higher prices to their domestic customers — whether they're companies or consumers.

Those price hikes can benefit domestic producers because the hikes make their goods relatively cheaper to bring to market than imported alternatives. For example, they might make it easier for US apparel manufacturers to compete with Chinese fast-fashion companies such as Shein and Temu.

Tariffs can also spur foreign producers to drop their prices to try to keep their products competitive, hurting their domestic industry and their country's economy, and partly offsetting the upward pressure on prices from tariffs.

The countries involved may also trade lower volumes of the product if both supply and demand fall in response to the tariffs.

A 2019 research paper on the initial impact of Trump's first-term tariffs found they fully passed through into the domestic prices of imported goods — and hurt consumer choice by reducing the availability of imported varieties.

Tariffs are frequently pitched as a tool to protect domestic jobs. A National Bureau of Economic Research working paper published in January found that the 2018-2019 trade war did not affect employment in newly protected sectors. The study also found that retaliatory tariffs from other countries contributed to job losses in domestic sectors such as agriculture and were only partly mitigated by federal subsidies.

Advantages of tariffs can include stronger domestic industries, increased government revenue, and pressure on other countries to stop unfair trading practices and help address issues such as illegal immigration and the drug trade.

Disadvantages can include tariffs' effects on consumers in terms of higher prices and reduced choice, plus the risk of retaliatory tariffs that could lead to employment losses in some industries and a full-blown trade war.

Moreover, a study published in The Economic Journal in 2021 found that retaliatory tariffs "disproportionately targeted more Republican areas," suggesting they were aimed at Trump's base to try to maximize their political power.

How Trump's tariff plan would work

Trump is no stranger to using tariffs. He called himself "Tariff Man" during his first term for imposing tariffs on products such as steel and aluminum plus a wide range of Chinese goods.

He replaced the North American Free Trade Agreement with the United States-Mexico-Canada Agreement in his first term, allowing most goods to continue freely passing between those countries.

That would change if Trump goes ahead with sweeping tariffs on Mexican and Canadian goods. Products passing into the US from its northern and southern borders would be subject to duties, and the money collected would flow to the US Treasury.

A key question is whether the tariffs would result in higher inflation. Inflation, or the annualized pace of price increases, hit a 40-year high of more than 9% in 2022, spurring the Federal Reserve to raise interest rates from nearly zero to above 5% in less than 18 months.

Inflation has dropped below 3% in recent months, freeing the Fed to begin cutting rates. The question is whether Trump's tariffs would cause price growth to accelerate again and delay further rate cuts — especially as people's deep concerns about higher living costs was a key reason they reelected him.

• President Joe Biden said that he hopes Donald Trump "rethinks" imposing tariffs on Mexico and Canada.
• Trump has said he may impose a 25% tariff on the two allies' imports after he retakes office.
• The president-elect has long had protectionist trade views.

President Joe Biden on Thursday expressed hope that President-elect Donald Trump would back down on his plan to impose tariffs on two of the US' closest allies.

"I hope he rethinks it, I think it is a counterproductive thing to do," Biden told reporters on Thanksgiving.

Days before the holiday, Trump pledged to enact a 25% tariff on all Mexican and Canadian imports until the two countries do more to address illegal drugs and immigration. He said the tariffs would be among his first actions upon taking office, reopening the door to a national security law that lets the president impose tariffs with few limitations.

Trump's vow threatens to roil relations between the US and its two neighbors and may call into question the USMCA, a rewriting of the North American Free Trade Agreement that stands as one of his biggest first-term achievements.

Biden and Vice President Kamala Harris teed off on Trump and his tariff threats throughout the 2024 campaign. Trump never retreated from more protectionist policy, a break from traditional GOP policy.

The US, Biden said, can't afford to alienate its two North American neighbors.

"The last thing we need to do is screw up those relationships," the president said.

It remains to be seen what Trump will do. His first administration imposed various tariffs on US allies' imports, including on Mexican and Canadian steel and aluminum.

In May 2019, Trump threatened to impose a 5% tariff on all Mexican imports with the chance for additional escalation if the nation failed to do more to stop illegal immigration. His threat briefly roiled financial markets, but such tariffs never came to fruition.

Mexico is mostly moving to de-escalate.

Trump spoke with Mexican President Claudia Sheinbaum not long after he made the new tariff threat.

Both sides seem happy with the conversation.

"Just had a wonderful conversation with the new President of Mexico, Claudia Sheinbaum Pardo," Trump wrote on Truth Social on Wednesday. "She has agreed to stop Migration through Mexico, and into the United States, effectively closing our Southern Border."

Sheinbaum later said in a statement on X that she had not agreed to effectively close the border. She told reporters on Thursday that she was confident a trade war could be avoided.

"There will be no potential tariff war," Sheinbaum said, according to The Associated Press.

President-elect Trump said he spoke with Mexican President Claudia Sheinbaum Pardo, saying she has agreed to "stop Migration through Mexico, and into the United States" following threats this week to significantly tariff goods from coming into the U.S. from its southern neighbor. 

Trump vowed to impose 25% tariffs on Mexico and Canada if both nations failed to do more to stop the flow of illegal immigrants and drugs into the U.S. Sheinbaum, who recently took office, said on Wednesday that Mexico would retaliate if Trump followed through on his promise. 

TRUMP LIKELY TO MAKE SEVERAL BORDER SECURITY MOVES ON FIRST DAY, SAYS EXPERT

"If there are U.S. tariffs, Mexico would also raise tariffs," she said during a press conference. 

On Wednesday, Trump said he spoke with his Sheinbaum about the matter. 

"Just had a wonderful conversation with the new President of Mexico, Claudia Sheinbaum Pardo," he wrote on Truth Social. "She has agreed to stop Migration through Mexico, and into the United States, effectively closing our Southern Border. We also talked about what can be done to stop the massive drug inflow into the United States, and also, U.S. consumption of these drugs. It was a very productive conversation!"

MEXICAN PRESIDENT MIGHT BE CHANGING VIEW ON US AS TRUMP WIN SENDS WARNING TO RULING SOCIALISTS 

In a subsequent post, he said that: "Mexico will stop people from going to our Southern Border, effective immediately. THIS WILL GO A LONG WAY TOWARD STOPPING THE ILLEGAL INVASION OF THE USA. Thank you!!!"

In a post on X, Sheinbaum said she spoke with Trump by phone and that the two discussed "strengthening collaboration on security issues" and that the conversation was "excellent," Reuters reported. 

Trump has long complained that Mexico has failed to do enough to stop the flow of migrants and illicit drugs on its side of the southern border.  

In a post on X, Sheinbaum said she explained the "comprehensive strategy" Mexico has employed to address the "the migration phenomenon, respecting human rights."

"Thanks to this, migrants and caravans are assisted before they reach the border," she wrote. "We reiterate that Mexico's position is not to close borders but to build bridges between governments and between peoples."

Trump also threatened to impose an additional 10% tariff on China over the massive amounts of fentanyl coming into the U.S. from Mexico. 

U.S. officials have frequently said that illicit fentanyl is manufactured in Mexico using Chinese precursors and then smuggled across the border by drug cartels.

Fentanyl, a synthetic opioid that is up to 50 times stronger than heroin and can be fatal in small doses, has claimed the lives of hundreds of thousands of Americans and is a factor in many drug overdose deaths. 

On Wednesday, Trump said he would be working on a large-scale ad campaign explaining the dangers of fentanyl. 

"Millions of lives being so needlessly destroyed. By the time the Campaign is over, everyone will know how really bad the horror of this Drug is," he said.

In response to the threat of more tariffs, the China Daily newspaper – which is run by the Chinese Communist Party – published an editorial Tuesday saying, "The excuse the president-elect has given to justify his threat of additional tariffs on imports from China is far-fetched," according to Reuters.

Fox News Digital's Greg Norman contributed to this report.  

• Donald Trump announced sweeping tariffs on Mexico, Canada, and China, rattling global markets.
• The president-elect may be using threats as leverage to get other leaders to comply, analysts said.
• Analysts see more tariffs and uncertainty, and say companies and investors should plan accordingly.

President-elect Donald Trump has two months until he takes office, but he's already dishing out orders — and shaking financial markets.

On Monday, Trump took to his Truth Social platform to announce that he would sign an executive order on his first day in office to impose a 25% tariff on all goods from Mexico and Canada and an additional 10% tariff on imports from China.

"This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!" Trump wrote.

Economists and analysts are now bracing for more uncertainty as they await Trump's next moves. While Monday's tariffs announcement marked a new escalation, it's still unclear exactly when and how the incoming administration would enact these policies.

Trump jolted global markets, but the reaction was 'benign'

Trump's announcements surprised global markets, with the Canadian dollar and the Mexican peso losing ground against the US dollar.

On Tuesday, the Canadian dollar weakened by 0.8% against the greenback, while the Mexican peso fell as much as 2.7% versus the buck to a two-year low.

As for stocks, the iShares MSCI Mexico ETF dropped by as much as 3%, while the iShares MSCI Canada ETF fell by about 1%. Major Asian markets were about 1% lower on Tuesday and mixed on Wednesday.

The S&P 500 closed 0.6% higher at a record level on Tuesday, and the Dow Jones Industrial Average and Nasdaq Composite also gained. However, futures underlying the benchmark indexes were in the red on Wednesday.

"The equity market reaction has so far been very benign, we would argue likely on the back of the transactional interpretation," wrote George Saravelos, the global cohead of foreign exchange research at Deutsche Bank, on Tuesday.

Saravelos was referring to market chatter that Trump's tariff threats are simply leverage to get what he wants — because that was how he wielded them in his first term.

However, the relatively muted market reaction could herald more aggressive warnings from Trump.

"The first Trump administration showed that the more benign the market reaction, the greater the likelihood of further escalation," wrote Saravelos.

Canada, Mexico, and China are just the "opening move" in Trump's "global negotiating game" in his second term, Dave Townsend, a partner in the government solutions and investigations practice group at law firm Dorsey & Whitney, told Business Insider.

"There will be many more moves involving many countries, including retaliatory action against US exports to trading partners," he added.

Mexican President Claudia Sheinbaum signaled her country was ready to hit back. She said at a press conference on Tuesday that "one tariff will be followed by another, and so on, until we put joint ventures at risk."

Companies are front-loading ahead of higher tariffs

Trump is likely to take a far more protectionist approach regarding tariffs — one of the few stances the president-elect reliably adopts, wrote Nick Marro, the principal economist for Asia and global trade lead at the Economist Intelligence Unit.

"Trump changes his mind on many things, but tariffs — and tariffs on China, specifically — are one of the key areas of ideological consistency that we've seen from him over the past 10 years," he wrote.

Companies and investors should think about "how to prepare for the worst," Marro added.

Some companies are already thinking ahead and front-loading imports to the US to avoid potentially higher tariffs, wrote economists from Goldman Sachs in a Tuesday analysis of earnings calls and media reports.

"We see risks that the stockpiling boost to imports could be a bit larger and/or more prolonged given the sizable lead time between now and inauguration, particularly if the Trump administration follows precedent and exempts goods already in transit," they said.

Investors might be too blasé about how escalating tariffs could hurt their portfolios, Neil Wilson, chief market analyst at Finalto, wrote on Wednesday.

"I wonder if the market is a tad complacent about the nature of a trade war, but I do think it's going to be more heavily felt in the FX markets than in US equity indices," he said.

• President-elect Donald Trump is expanding his plans for tariffs on Mexico, China, and Canada.
• The US imports key goods from them that may increase in price, like electronics, oil, and gas.
• Trump's tariff plans could face legal issues, and he may choose not to implement them.

President-elect Donald Trump's newly expanded proposal to increase tariffs on the US's three largest trading partners could raise prices on various goods Americans rely on.

Business Insider looked at what the US imports the most from Mexico, Canada, and China to determine the products most likely to increase in price if Trump's plans come to pass.

The biggest categories are oil, electronics, and vehicles.

On Monday night, Trump posted on his Truth Social platform that on his first day in office, he would "sign all necessary documents" to impose a 25% tariff on goods imported from Mexico and Canada. He also threatened a 10% tariff on imports from China "above any additional" tariffs on that country.

While the feasibility and legality of Trump's proposal are still unknown, if implemented, the proposed tariffs could affect a wide variety of goods Americans use daily. The Census Bureau reported that in 2023, the US imported about $1.3 trillion in goods from China, Mexico, and Canada combined.

From Canada, the top 2023 imports included over $92 billion worth of crude oil, about $34 billion in passenger cars, and almost $9 billion in natural gas.

The US imported over $65 billion worth of car parts from Mexico in 2023, along with about $26 billion in computers, nearly $20 billion in crude oil, and almost $14 billion in medicinal equipment.

China, meanwhile, is a major supplier of electronics to the US. The census data showed that in 2023, the US imported nearly $67 billion in cellphones and other household goods from China, over $37 billion in computers, and more than $32 billion in games, toys, and sporting goods.

Some companies have already been preparing to increase prices as a result of Trump's tariff plans on the campaign trail. Walmart CFO John David Rainey told CNBC on November 19 that price hikes are likely on the horizon if Trump implements his tariffs: "We never want to raise prices. Our model is everyday low prices. But there probably will be cases where prices will go up for consumers."

This is the most detailed tariff plan Trump has released to date. On the campaign trail, he did not detail tariffs on Canada and Mexico — he proposed a 60% tariff on all imports from China, along with a 10% to 20% tariff on goods imported from anywhere else.

Trump appears to be using this round of tariff threats to push for changes in migration and drug policy in the targeted nations. "This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!" Trump wrote of the Mexico and Canada tariffs.

Some political leaders in Canada responded to Trump's threat on Monday night. François Legault, the premier of Quebec, wrote in a post on X that Trump's plan posed a huge risk to Quebec's and Canada's economies. Per a translation from X, he added: "We must do everything possible to avoid 25% tariffs on all products exported to the United States."

Additionally, Trump's plan could spark legal issues. Arturo Sarukhán, a former Mexican ambassador to the US, wrote in a post on X that the tariffs would violate the US-Mexico-Canada agreement, a free-trade agreement negotiated by Trump in his first term that went into effect in July 2020.

Companies and economists have said that Trump's tariff plans would increase consumer prices. BI previously reported that Trump's broad tariff proposals were likely to increase prices across the board, from clothes and footwear to computers and video games.

Trump has denied that would be the case. "I am going to put tariffs on other countries coming into our country, and that has nothing to do with taxes to us. That is a tax on another country," Trump said in an August speech.

The tariffs implemented during Trump's first term did not significantly influence inflation, but his proposals for his second term are much broader and could have a larger impact on prices if implemented.

At this point, however, Trump's proposals could still change. During his first term in 2019, Trump announced new tariffs on Mexico with the aim of strengthening the border, but following criticism from lawmakers — including some Republicans — he withdrew the plan.

• Donald Trump's latest tariff threats have set alarm bells ringing on Wall Street.
• The president-elect said he would impose tariffs on exports from Mexico and Canada, as well as China.
• Analysts warned of a trade war, volatility, steeper inflation, and a flight to safety in markets.

Donald Trump rattled financial markets late Monday by warning he would slap 25% tariffs on Mexican and Canadian exports to the US until the flow of illicit drugs and illegal migrants into America stops. He also said he'd impose another 10% tariff on imports from China until the drug problem is resolved, in addition to the 60% he proposed during the election campaign.

Analysts said the president-elect's latest threats could presage tariffs on other countries' exports and escalate into a full-scale trade war. They also said it could fuel volatile trading and a flight to haven assets in markets. There's also the threat of stoking inflation, meaning interest rates stay higher for longer.

Here's what analysts and commentators are saying:

George Saravelos, global cohead of FX research at Deutsche Bank

"Free trade agreements are not safe. Canada and Mexico are part of the USMCA which was negotiated by Trump himself. It is clear that even countries with existing agreements with the US can be subject to tariffs.

"The softer the market reaction, the greater the likelihood of more tariffs. The equity market reaction has so far been very benign, we would argue likely on the back of the transactional interpretation. That US domestic small-caps have been leading the recent market rally also helps reduce the impact. The first Trump administration showed that the more benign the market reaction, the greater the likelihood of further escalation."

Dan Coatsworth, investment analyst at AJ Bell

"If those tariffs are at the top of his agenda, there is now an elevated risk they will be closely followed by punishing tariffs on other countries. Trump clearly wants to make his mark and show he's the boss.

"There has been a view among some investors that Trump's tariff talk was a negotiating tactic, a threat rather than a promise. That might still end up the case, but it's clear that the president-elect has no intention of backing down for now."

Matt Britzman, senior equity analyst at Hargreaves Lansdown

"European equity markets braced for a sharp drop on Tuesday as Trump's tariff threats against China, Mexico, and Canada sent shockwaves through global sentiment.

"The president-elect's scorched-earth approach has stoked fears of a trade war, with investors increasingly wary that Europe could be next in his crosshairs."

Nigel Green, CEO of deVere Group

"These tariffs will not only drive up costs for companies but also fuel inflation, which could lead to further tightening of monetary policy.

"Markets hate uncertainty, and the prospect of a full-blown trade war will send investors scrambling to reassess their exposure."

Mark Haefele, chief investment officer of UBS Global Wealth Management

"While investors are once again on edge following Trump's latest tariff threats, we think markets also recognize that the risks of higher inflation and interest rates are implicit constraints on his policy agenda, with eventual policy outcomes potentially less inflationary than some investors previously feared.

"We see further volatility ahead, but we also expect US Treasury yields to fall in the year ahead following a 65-basis-point rise over the past two months."

Ruben Ferreira, FlowCommunity

"The medium to long-term outlook could shift if trade tensions escalate, potentially disrupting international trade relations.

"Such developments may heighten market uncertainty, driving increased demand for safe-haven assets such as gold as investors seek protection against market risks and economic instability."

• Donald Trump said he would impose 25% tariffs on Canadian and Mexican exports to the US.
• The US is a big buyer of products from Canada and Mexico, particularly in the energy and auto sectors.
• Canadian energy exports to the US were worth $128 billion last year.

Donald Trump took aim Monday at three of America's biggest trading partners, announcing plans for tariffs on imports from China, Mexico, and Canada.

The US received 83% of Mexico's exports and 75% of Canada's exports last year, official data shows. Mexico sent $379 billion worth of exports to the US in the first nine months of this year, with Canadian exports topping $309 billion, the data shows.

Investors reacted to Trump's latest tariff threats by betting on the greenback and paring their exposure to vulnerable assets. The US dollar strengthened against both the Canadian dollar and the Mexican peso. US stocks broadly gained Tuesday while indexes in Europe and Asia retreated.

"Investors should prepare for immediate volatility in sectors such as automotive, technology, and agriculture — industries deeply intertwined with trade agreements and foreign markets," Nigel Green, the CEO of deVere Group, said in a Tuesday note.

Some commentators were skeptical whether the incoming president would enact the tariffs, suggesting he might be rattling his saber to secure better trade terms.

The tough talk might be a "negotiating tactic, a threat rather than a promise," Dan Coatsworth, an investment analyst at AJ Bell, said in a morning note. "That might still end up the case, but it's clear that the president-elect has no intention of backing down for now."

Even so, here are some Canadian and Mexican industries that could be affected by Trump's new tariffs.

Energy

Canada is the top supplier of crude oil to the US.

It sold mineral fuels, oils, and distillation products worth $128 billion to the US last year, which accounted for nearly one-third of its total exports to the country, Trading Economics data shows.

Tariffs stand to make energy products more expensive, raising overall inflation and eroding consumers' spending power.

Wilbur Ross, who served as commerce secretary in Trump's first administration, told CBC earlier this month he didn't expect Trump to tax Canadian energy imports.

"We import a lot of energy from Canada. I can't imagine that the president would want to tax that, because all it would do would be to raise our costs and not help anything with more American jobs," Ross said.

Several Toronto-listed energy stocks fell on Tuesday morning. Canadian Natural Resources slid 3%, Suncor Energy and Arc Resources slipped 2%, and Imperial Oil and Tourmaline Oil dipped 1%.

Autos

Both Canada and Mexico send a substantial number of vehicles to the US, with auto exports worth $58 billion and $112 billion, respectively, in 2022, per Trading Economics data.

Mexico is an auto powerhouse. The industry employs more than 1 million people there and has long attracted equipment and parts makers that serve it.

The country exported 255,910 cars in October to the US, a 7.5% increase from the previous year, per official data — just over three-quarters of Mexico's total auto exports.

Automakers with operations in Mexico include Toyota, Nissan, and Honda. Tesla announced plans in 2023 for a new factory south of the border that is now in limbo, and the tariffs could complicate matters for Elon Musk's company.

Tesla's Chinese rival BYD is also planning a factory in Mexico, but Mexican officials fear it could anger Trump, The Wall Street Journal reported Tuesday.

Auto stocks fell Tuesday with GM down 7%, Stellantis 5% lower, Honda down 3%, Ford and Volkswagen both shedding 2%, and Mercedes-Benz and BMW both off about 1%.

Machinery and more

Both Canada and Mexico count machinery as one of their largest export categories to the US. Canada exported $34 billion worth of "machinery, nuclear reactors, boilers" in 2023, while Mexico shipped goods worth $91 billion in that category the previous year, per Trading Economics.

Industrial and manufacturing stocks dropped on Tuesday with Carrier Global and Xylem down 3%, ASML and SPX Technologies down 2%, and nVent Electric and ESAB down 1%.

Beyond energy, vehicles, and machinery, Canada exports commodities, plastics, electronics, and other goods worth tens of billions of dollars to the US annually.

Mexico exports similar amounts of electrical and technical equipment, furniture, plastics, food, and beverages across its northern border.