US President Donald Trump has confirmed a 25% tariff on imports from Canada and Mexico, set to take effect on February 1, with uncertainty over whether crude oil will be included.
“The move is aimed at addressing migration, fentanyl trafficking, and trade imbalances but carries significant risks for investors worldwide,” says Nigel Green, CEO of global financial advisory and asset management giant, deVere Group.
The US imports roughly 40% of its crude oil, with Canada as the dominant supplier. If oil is hit with tariffs, the impact could hit energy markets, pushing up costs for businesses and consumers. The knock-on effect could drive inflation higher, undermining economic growth.
“Energy markets are already fragile amid global supply constraints. Additional tariffs on crude would inject unnecessary volatility, making fuel and transportation more expensive worldwide,” says Nigel Green.
“This translates to increased uncertainty, particularly for industries reliant on stable energy costs, such as manufacturing, transportation, aviation, and logistics.”
Second, higher market volatility.
Uncertainty around trade policies fuels market instability. With Canada and Mexico planning retaliatory measures, global markets are bracing for fresh turbulence. Investors with exposure to North American equities, currencies, and supply chain-dependent sectors must reassess their positions.
“This move introduces another layer of unpredictability at a time when markets are already contending with monetary policy shifts and geopolitical risks,” Nigel Green adds.
“Investors should consider diversifying their portfolios to hedge against heightened volatility and potential trade disruptions by increasing exposure to defensive sectors such as healthcare, utilities, and consumer staples, as well as exploring alternative assets like gold and real estate.”
Third, winners and losers.
Certain industries will bear the brunt of these tariffs, while others may benefit.
Manufacturing, automotive, and consumer goods sectors relying on cross-border supply chains face rising costs, which could dent profitability.
Agriculture may also suffer if retaliatory tariffs target US exports. On the other hand, domestic energy producers, certain US-based manufacturers, and protectionist-backed industries could see short-term gains from reduced competition.
“Protectionist policies may score political points, but they rarely deliver sustainable economic benefits,” notes Nigel Green.
“Global investors should monitor these developments closely, as escalating trade tensions could weigh on US equities and influence broader global asset allocation strategies.”
He concludes: “With the tariff deadlines looming, global investors must prepare for potential disruptions.”
