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Address 500 Centre Street SE 27th Floor Calgary AB, T2G 1A6
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Milan Cacic

April 04, 2025

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SELF-INFLICTED WOUNDS…

It appears that Donald Trump’s strategy is maximum short-term disruption.

 

US importers are feeling the brunt of the tariff implementation. Just take a look at Restoration Hardware [RH–US], its stock has fallen from $400 at the end of January to $140 at the time of writing. It fell more than $100 on Thursday alone, which caught the CEO off guard during a live interview and made for some colourful language! These companies get most of their products from Asia, which now has 50-60% tariffs. They either have to pass these costs on to the consumers or make less money. Either way, it's not good for the consumer or the companies.

 

Both Canada and Mexico were spared from the list of reciprocal tariffs. USMCA-compliant goods will continue to have no tariffs, but non-compliant goods will be levelled at 25% (except for oil and potash, which will be at 10%).

 

Obviously, the administration wants to reset global trade. What the market wants is clarity. What do countries have to do to negate the tariffs? When the Trump administration does their first tariff (re)negotiation, it is likely that the market will jump significantly. Until then, uncertainty will drive everyone's investment thesis.

 

If you feel like you're experiencing déjà-vu, you may not be wrong. Below is a chart of what happened when Donald Trump was elected to his first term in 2016 and started implementing tariffs (2018). Unfortunately, we've been here before. I guess it's true what they say – history repeats itself!

 

We are navigating this uncertain environment and making changes as we see fit. While we are comfortable with our model asset allocations we did raise more money again this week in our models.

 

A chart showing S&P500 returns starting Jan 2018 and Jan 2025

 

I have also included some commentary from our CIBC Economics team entitled “Humpty Dumpty had a great fall”.

 

As always, if you have any questions, please feel free to give us a call.

 

Have a great weekend.

 

Milan

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CIBC Private Wealth” consists of services provided by CIBC and certain of its subsidiaries through CIBC Private Banking; CIBC Private Investment Counsel, a division of CIBC Asset Management Inc. (“CAM”); CIBC Trust Corporation; and CIBC Wood Gundy, a division of CIBC World Markets Inc. (“WMI”). CIBC Private Banking provides solutions from CIBC Investor Services Inc. (“ISI”), CAM and credit products. CIBC Private Wealth services are available to qualified individuals. Insurance services are only available through CIBC Wood Gundy Financial Services Inc. In Quebec, insurance services are only available through CIBC Wood Gundy Financial Services (Quebec) Inc.


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