He threatened them, he brought them in, and then he quickly put them on pause. U.S. President Donald Trump created chaos with his tariffs. It forced the leaders of Mexico and here in Canada to scramble to meet some of his demands in an effort to keep the tariffs at bay.

Even though the 25% tariffs are on pause for now, we’re still feeling the effects. Markets like the S&P 500 saw a sudden decline with investors looking to sell. Their reaction was driven by the potential economic impact of the tariffs, including disrupted supply chains and increased costs for businesses and consumers. The TSX took a dip too, but it managed to recover. Any trade war though is likely to increase volatility in the markets.
 

We’ve also seen the impact on the Canadian dollar. It dropped below $0.70 U.S. and analysts predict it to go even lower. That will have a further impact on the Canadian economy.
 

What does this mean for your retirement? Well, if you’ve invested in Canadian businesses that are more domestically focused, or are less exposed to U.S. trade, your portfolio might be in a better position for the time being. However, the weaker Canadian dollar could start to impact other industries, helping those who export out of Canada and hurting those who import into our country.
 

The auto and energy industries for example. The majority of vehicles made in Canada are exported to the U.S. so any tariff could significantly impact that industry. It would feel the impact of tariffs much quicker with job losses and production shifts likely to happen in the short term. The energy industry would also take a hit, but the impact would be a bit more gradual. The weaker Canadian dollar benefits the export of oil, but only to a point. The industry could also increase trade to alternative markets like Asia to try and offset any losses.
 

As Dave likes to say, diversification is the key. You don’t want to put all of your financial eggs in one basket. That way you aren’t fully exposed to just one scenario. The best thing you can do is contact a financial advisor to talk you through the scenarios. That way you’re not making a quick decision based on fear with short-term data.
 

Dave, Faisal, Leanna and Rob talk about these things and how they impact your retirement at our retirement seminars. Even if you already have a financial advisory, come and hear how our team can help you financially navigate your way through retirement. Seating is limited, so register for our next one today!