BJK Financial Group Blog

Staying the Course Amid Tariff Uncertainty
What investors should be thinking about

My perspective: Stay focused on the long term, review diversification, and use volatility thoughtfully rather than reacting emotionally.

Recent headlines surrounding new U.S. tariffs on certain Canadian goods have created understandable concern for investors. As negotiations between Canada and the United States continue to evolve, many Canadians are wondering what this means for the economy, financial markets, and their portfolios. Reports indicate that the latest tariffs affect selected categories of Canadian exports and have prompted discussions regarding potential Canadian responses.

While these developments may increase uncertainty and market volatility, I believe the most important message for investors is simple: stay focused on your long-term plan.

Market Volatility Is Normal

Periods of uncertainty are nothing new. Markets have navigated recessions, political changes, financial crises, pandemics, inflationary periods, and trade disputes throughout history. While every situation is unique, the lesson for long-term investors is often the same: short-term headlines can create market volatility, but successful investing typically requires patience and discipline.

Trade tensions can create challenges for businesses and investors. Companies may delay investment decisions, adjust supply chains, or reassess growth plans. Economists have also noted that uncertainty itself can affect business confidence and economic activity.

However, making significant portfolio changes based solely on news headlines can sometimes prove more damaging than the event itself. Markets often react quickly to uncertainty, but they can also recover quickly when clarity emerges.

Diversification Matters More Than Ever

One lesson reinforced by recent events is the importance of diversification.

Many Canadian investors naturally have significant exposure to Canada and the United States. While North America remains home to many innovative businesses and continues to be a vital component of most portfolios, there may be benefits to ensuring investors have meaningful exposure to opportunities outside North America as well.

International equities provide access to different economies, industries, and currencies. They can help reduce overall portfolio concentration and may offer opportunities when certain regions are trading at valuations that differ from those found in Canada and the United States.

For some investors, particularly those with a heavier equity allocation, it may be worthwhile to review whether increasing international equity exposure could improve diversification. Examples of funds that may be considered include international equity mandates such as the National Bank International Equity Fund, which provides exposure to companies and economies outside North America.

This is not about abandoning North America. Rather, it is about maintaining a balanced portfolio that is not overly dependent on the economic or political environment of any one region.

Bonds Can Still Play an Important Role

Another area worth revisiting is fixed income.

When markets become volatile, investors often focus on equities. However, bonds continue to play an important role in many portfolios by helping reduce overall volatility and providing potential stability during uncertain periods.

The economic impact of tariffs can be complex. On one hand, tariffs can contribute to inflation by increasing the cost of certain goods. On the other hand, they can potentially slow economic growth if businesses delay investment and consumers become more cautious.

If economic growth slows meaningfully, many investors tend to seek stability through higher-quality fixed income investments. This is one reason diversified portfolios often maintain an allocation to bonds, even when equity markets are generating strong returns. Recent market commentary has highlighted the importance of diversification and risk management during periods of heightened trade uncertainty.

For investors with a high concentration in equities, it may be worthwhile to review whether their portfolios have sufficient fixed income exposure. Investors may wish to discuss with their advisor whether additional international diversification or fixed income exposure is appropriate for their individual circumstances. These types of investments may help provide diversification and potentially reduce overall portfolio volatility. The suitability of any investment will depend on an individual's objectives, time horizon, and risk tolerance.

Volatility Can Create Opportunity

While volatility can be uncomfortable, it can also create opportunities.

Market declines often make investors nervous, but they may also allow investors to purchase quality investments at lower prices than were previously available. Nobody knows exactly where markets will move in the short term, and attempting to predict market movements consistently can be extremely difficult.

For long-term investors, periods of weakness can sometimes be viewed as opportunities to gradually build positions rather than reasons to abandon a financial plan.

This is where discipline often becomes more important than prediction.

The Value of Dollar-Cost Averaging

One strategy that may be particularly useful during volatile periods is dollar-cost averaging.

Rather than investing a large amount all at once, investors contribute a fixed amount on a regular schedule. When markets decline, those contributions purchase more units. When markets rise, they purchase fewer units. Over time, this process can help smooth the impact of market fluctuations.

For investors holding excess cash or making regular contributions to investment accounts, market volatility may provide an opportunity to continue investing systematically while maintaining a long-term perspective.

Dollar-cost averaging does not eliminate investment risk, guarantee profits, or protect against losses. However, it can help reduce the emotional component of investing and encourage consistency regardless of market conditions.

Focus on What You Can Control

The current tariff dispute will likely continue generating headlines in the months ahead. Markets will continue to react to economic data, corporate earnings, central bank decisions, and developments in trade negotiations.

However, investors have limited control over those events.

What investors can control is maintaining an appropriate asset allocation, diversifying across regions and asset classes, investing consistently, managing risk appropriately, and staying focused on long-term goals.

For some investors, this may be an appropriate time to review asset allocation and discuss whether additional international diversification or fixed income exposure could strengthen their portfolio. For others, it may simply be a reminder that a well-constructed investment plan is designed to weather periods of uncertainty.

In my view, the current environment reinforces principles that have always mattered: stay diversified, remain disciplined, think long term, and avoid making emotional decisions based on short-term market events.

While volatility may increase in the near term, investors who remain focused on their objectives and maintain a disciplined approach are often best positioned to navigate whatever comes next.

Important Disclosure
This article is provided for general informational purposes only and should not be considered investment, tax, or legal advice. Any investment strategies or fund examples discussed are provided for illustrative purposes only and may not be suitable for all investors. Investors should consult with their financial advisor before making investment decisions. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated.

References

• iA Private Wealth Investment Products & Platforms. Monthly Market Snapshot. December 2024.
• Ivey Business School. “Ask the Experts: Trump’s 50% Tariffs on Canada.” July 23, 2026.
• ABC News. Reporting on U.S. tariffs affecting selected Canadian goods. August 21, 2026.
• Global News. Reporting on Canada’s response to new U.S. tariffs. August 22, 2026.
• CBS News. Reporting on U.S.-Canada tariff developments. August 22, 2026.

This article reflects the author’s general views at the time of writing and is intended for educational purposes only. Any reference to specific funds is provided solely as an example of investment solutions that may be considered and does not constitute a recommendation to buy or sell any security.
 

Global markets have once again been reminded that geopolitics can move quickly—and often unexpectedly. Recent developments surrounding a preliminary U.S.–Iran peace agreement, alongside discussions at the 2026 G7 Summit, are already influencing oil prices, investor sentiment, and economic expectations worldwide. For Canadian investors, these events highlight the importance of diversification, discipline, and focusing on long-term planning amidst short-term volatility.

After months of conflict, the United States and Iran have reached a framework agreement aimed at ending hostilities, reopening the Strait of Hormuz, and restoring oil flows to global markets. This development carries significant economic implications, as the Strait of Hormuz is one of the world’s most critical energy routes, responsible for roughly 20% of global oil shipments. Markets reacted quickly to the announcement, with oil prices declining and equity markets rebounding on expectations of improved stability.

At the same time, leaders from the world’s largest advanced economies gathered in France for the 2026 G7 Summit. Discussions focused on global security, trade dynamics, inflation pressures, and economic coordination. The summit reflects the growing influence of geopolitical developments on economic outcomes, as policymakers continue to balance inflation, economic growth, and global stability.

From a market perspective, recent events demonstrate how quickly sentiment can shift. Earlier in the year, geopolitical tensions contributed to rising oil prices, increased inflation concerns, and higher market volatility. The announcement of a potential peace agreement has helped ease some of those pressures, although uncertainty remains regarding implementation and long-term global stability.

For Canada, the implications are both direct and indirect. As a major energy exporter, Canada benefits from strong global demand; however, moderating oil prices may temper near-term gains in the energy sector. At the same time, easing energy costs could support a more stable inflation environment, which may influence interest rate expectations going forward.

Global trade dynamics and currency movements will also continue to play an important role in shaping Canada’s economic outlook. Developments discussed at the G7—including trade alignment, supply chain resilience, and economic cooperation—highlight Canada’s position within an interconnected global economy.

From an advisory perspective, these developments reinforce the importance of maintaining a diversified portfolio, avoiding reactive investment decisions based on short-term headlines, and ensuring alignment with long-term financial goals. While geopolitical events can create short-term volatility, long-term investment outcomes are more closely driven by economic fundamentals and disciplined planning.

The U.S.–Iran agreement and the G7 Summit may represent a step toward greater global stability, but uncertainty will likely remain a key feature of the current environment. As such, maintaining a balanced, long-term investment strategy continues to be the most effective approach for investors.

Sources

CNBC – U.S.–Iran peace agreement coverage

TD Economics – Market implications of the agreement

CBS News – Market reaction (oil prices and equities)

EconoTimes / Firstpost – G7 Summit coverage and themes

Global News – Canadian economic risk considerations

IMF / J.P. Morgan – Global market and economic risk commentary

The Iran Conflict: Market and Economic Implications for Investors

Geopolitical events often create periods of heightened uncertainty in global financial markets, and the current conflict involving Iran is no exception. As investors digest rapidly evolving headlines, it is important to separate emotional reactions from economic fundamentals and to understand how such events typically affect markets in the short term and over the medium term.

Historically, markets have shown resilience through geopolitical shocks, even when volatility rises sharply in the early stages. The present situation, however, carries unique risks due to the strategic importance of energy infrastructure in the Middle East and the critical role of the Strait of Hormuz in global oil and liquefied natural gas (LNG) transportation.

Why the Strait of Hormuz Matters

The Strait of Hormuz is one of the most critical energy chokepoints in the world. According to the International Energy Agency, approximately 20 million barrels of oil per day—around 25% of global seaborne oil trade—transited the Strait in 2025, with roughly 80% destined for Asia. In addition, nearly 20% of global LNG trade passes through this narrow corridor, much of it originating from Qatar. [iea.org]

Recent hostilities and naval restrictions have already disrupted shipping flows. The Federal Reserve Bank of Dallas notes that a full or prolonged closure of the Strait would be three to five times larger than previous historical supply shocks, such as those seen during the 1970s oil crises. Even partial disruptions can materially raise transportation costs, insurance premiums, and global energy prices. [dallasfed.org]

Short‑Term Market Impact: Volatility First, Then Assessment

In the short term, markets typically respond to geopolitical conflict with:

• Higher oil and gas prices
• Increased volatility in equities
• A bid for traditional “safe‑haven” assets such as government bonds and gold

This pattern is already evident. Energy prices have risen sharply as markets price in supply disruption risk, while equity markets have fluctuated alongside changing expectations surrounding ceasefire or de‑escalation talks. [bing.com]

The International Monetary Fund has warned that prolonged disruption to Middle East energy flows could slow global growth and push inflation higher, particularly in energy‑importing regions such as Europe and Asia. These dynamics complicate central bank decision‑making, especially at a time when inflation has not yet fully normalized. [bing.com]

Medium‑Term Outlook: Why Markets Often Recover

While short‑term volatility can feel unsettling, history suggests that markets often stabilize once uncertainty around escalation or de‑escalation becomes clearer. According to multiple asset‑manager analyses, geopolitical shocks tend to have temporary impacts on long‑term market fundamentals, unless they result in sustained supply destruction or structural economic change. [bing.com]

In my view, once a credible peace or de‑escalation agreement is reached:

• Equity markets could experience a relief‑driven rally
• Risk premiums embedded in stock prices may unwind
• Investor focus is likely to shift back toward earnings, interest rates, and economic growth

That said, a return to “normal” may not be immediate.

Oil Prices: Why They May Stay Elevated Longer Than Expected

Even if hostilities subside, oil prices may remain higher for longer. There are several reasons for this:

1. Physical bottlenecks

Shipping backlogs and insurance constraints in the Strait of Hormuz may take time to resolve fully, even after peace agreements are announced. [bing.com]

2. Infrastructure damage

Attacks on pipelines, refineries, ports, and storage facilities across the region have created physical supply constraints. Repairing and safely restarting this infrastructure can take months or years, not weeks. [bing.com]

3. Limited spare capacity

While some producers have alternative export routes, the IEA notes that bypass capacity remains limited relative to the volume typically shipped through the Strait. [iea.org]

As a result, while oil prices may pull back from crisis peaks following a peace announcement, they may not return quickly to pre‑conflict levels.

NATO’s Role: A Clarifying Perspective for Investors

There has been renewed public discussion about NATO in recent months. For investors, it is helpful to understand one key fact:
NATO is fundamentally a defensive alliance.

Under Article 5 of the North Atlantic Treaty, member states commit to collective defence only if a member is attacked. NATO does not mandate pre‑emptive military action, nor does membership automatically obligate countries to participate in conflicts initiated outside the alliance framework. [bing.com]

From a market perspective, this distinction matters. It helps limit assumptions about automatic escalation across developed economies and reduces the probability of NATO‑wide military engagement becoming a base‑case scenario.

What This Means for Investors

Periods like this reinforce several long‑standing investment principles:

• Diversification matters during geopolitical shocks
• Market timing based on headlines is risky
• Staying aligned with long‑term goals is often more effective than reacting to short‑term fear

While volatility may persist, history suggests that patient investors who remain disciplined are better positioned when markets eventually stabilize.

Final Thoughts

The Iran conflict underscores how geopolitical risk can travel quickly through energy markets and into the global economy. In the near term, volatility and elevated oil prices are likely to persist. Over the medium term, a credible peace agreement could support a market rebound—though energy prices may normalize only gradually due to infrastructure damage and logistical bottlenecks.

As always, investors should focus on fundamentals, risk management, and their long‑term financial plan rather than making decisions based on rapidly changing headlines.

As I look back on 2025, the word that keeps coming to mind is resilience—not in the motivational-poster sense, but in the hard, data-driven reality of how markets and the Canadian economy absorbed repeated shocks and kept moving forward.

I’ll be candid: I did not expect this year to play out the way it did. With U.S. tariffs flaring across sensitive sectors and the constant headline risk that comes with President Trump’s approach to trade and policy, I genuinely thought we’d be staring at a market free fall by now. Instead, what we got was a year that forced investors to relearn an old lesson: markets can be remarkably forward-looking, and they can remain buoyant longer than our instincts (or our news feeds) suggest.

Markets: “Bad News” Didn’t Break the Tape

From a Canadian investor’s perspective, the equity story in 2025 was difficult to ignore. By early December, National Bank’s equity monitor noted the S&P/TSX was up roughly 30% year-to-date through November—an eye-catching number given how often the year was framed as a trade-war grind. National Bank TMX also highlighted that Canadian equities showed relative resilience in the face of unresolved tariff threats and trade tensions during the first half of the year. tmxinfoservices.com

What stood out to me wasn’t just the magnitude of returns, but the market’s ability to compartmentalize. Tariffs and geopolitics were treated as real risks, yet not always “systemic” ones—particularly when investors believed supply chains could adapt, governments could negotiate carve-outs, and central banks had room to move if growth softened.

The Economy: Holding Up—But Not Evenly

Canada’s real economy did not glide through 2025 untouched. In fact, we ended the year with a reminder that resilience can include sudden stumbles. Statistics Canada data reported in late December showed GDP contracted 0.3% in October 2025, with a partial bounce expected in November.  Manufacturing and other goods-producing areas were pressured, and tariff effects were specifically cited as a factor weighing on certain industries. Reuters

This is where the story becomes very regional. National headlines can hide how concentrated the pain is.

Ontario: Auto and Steel Felt the Tariff Reality

Here in Ontario, the tariff narrative was not theoretical. The Ontario government’s 2025 Fall Statement explicitly flagged that U.S. tariffs were impacting the competitiveness and viability of automotive and steel manufacturing, along with the livelihoods tied to cross-border trade. Ontario Budget

The Financial Accountability Office of Ontario (FAO) went further with scenario analysis earlier in the year, estimating meaningful job impacts under a tariff scenario and projecting a higher unemployment rate over the 2025–2029 outlook compared to a no-tariff baseline. FAO Ontario Whether one agrees with every assumption in scenario modelling, the direction is clear: Ontario’s manufacturing engine is particularly exposed when tariffs hit autos, parts, steel, and aluminum.

Trade Policy: A Year of Counters, Carve-Outs, and Ongoing Negotiations

On the policy front, 2025 was marked by both retaliation and restraint. The federal government’s own tariff guidance shows that Canada removed many counter-tariffs effective September 1, 2025, while keeping counter-tariffs in place on steel, aluminum, and automobiles. Canada+1 Meanwhile, Global Affairs Canada’s Trade Commissioner resources provide a useful timeline of U.S. actions under Section 232, including tariffs on steel/aluminum and on automobiles and parts—with important nuance around CUSMA compliance and U.S.-content exemptions. Trade Commissioner Service

This push-and-pull is exactly why I keep describing the environment as “volatile.” Even when the direction of policy is known, the scope, the timing, and the exemptions can change quickly—and markets are constantly repricing those probabilities.

The Green Transition: Momentum Delayed, Not Deleted

Another major theme this year was the U.S. shift away from aggressive climate and EV policy, which I believe has contributed to a delay in the green transition—especially in the auto sector that straddles the Canada–U.S. border.

From the Canadian side, there was continued emphasis on Canada’s EV policy framework, including references to Canada’s EV availability standard and the 2035 phaseout objective for new gas-powered vehicle sales. Environmental Defence At the same time, analysis out of Queen’s University noted the U.S. political intent and mechanisms that could be used to unwind or weaken EV-related policies and vehicle emissions standards. Queen's Law In practical terms, when the U.S. hesitates, North American supply chains and investment timelines often hesitate too—because automakers build for scale, and scale is policy-sensitive.

My takeaway is not that the green transition is over; it’s that the path is likely to be less linear than many expected a few years ago.

Looking Ahead: Three More Years of “Trump Volatility”

If 2025 taught me anything, it’s that we should plan as though policy volatility is not a one-off event—it’s a base case for the next several years. The combination of trade measures, negotiation cycles, sector-specific exemptions, and abrupt narrative shifts can keep risk elevated even when markets are trending higher.

For investors, that reinforces the discipline I come back to repeatedly:

• Diversification is not a slogan; it’s a volatility-management tool.
• Time horizon matters more than headlines.
• Risk capacity and risk tolerance should be revisited when the world changes—but not rewritten every time the news changes.

I was surprised by 2025—mostly because the market refused to validate the worst-case script. But I’m not taking that as a reason for complacency. I’m taking it as a reminder to stay structured, stay diversified, and stay realistic about what the next three years could bring.

This commentary is provided for general information and educational purposes only and does not constitute investment advice. Please consult with your advisor regarding your specific circumstances.

I grew up in Sault Ste. Marie, not far from Algoma Steel, so the domestic steel industry is a part of who I am. As a financial advisor, my role is to help clients stay informed—and grounded—when turbulent economic policy impacts Canadian markets. Recent U.S. tariff hikes on Canadian steel, aluminum, and related goods have certainly sparked concern—so let me walk you through what has happened, how Ottawa is responding, and what this means for Sault Ste. Marie, Algoma Steel, and broader Canada.

What happened: U.S. tariff escalation

On August 1, 2025, former U.S. President Donald Trump signed an executive order increasing tariffs on Canadian goods from 25 percent to 35 percent, particularly targeting imports not covered under USMCA, and even imposing 40 percent duties on transshipped goods routed through third parties. This is in addition to a doubling of steel and aluminum tariffs from 25 percent to 50 percent earlier in June 2025

While the tariffs don’t apply to goods compliant with USMCA, key Canadian export sectors—including steel, aluminum, lumber and autos—have been hit hard. Canadian businesses face sharply reduced access to U.S. markets, uncertainty around future trade policy, and elevated cost risk.

Algoma Steel: the local impact

Algoma Steel, headquartered in Sault Ste. Marie, has felt the brunt of these changes. Its CEO, Mike Garcia, confirmed that the U.S. market is effectively closed because of the 50 percent tariffs on steel and aluminum exports. The company has applied for $500 million in support under Ottawa’s Large Enterprise Tariff Loan facility (LETL) to help offset prolonged uncertainty and liquidity challenges.

Algoma acknowledges government negotiators are working “actively” to find a fair, durable trade resolution—including regular feedback on what may support their operations.

Canadian government response: measured and multifaceted

1. Retaliatory tariffs and quotas

Following the March steel/aluminum tariff round, Canada imposed 25 percent retaliatory tariffs on U.S. vehicles and other goods. For items affected by ongoing disputes, Ottawa set tariff‑rate quotas aligned with 2024 import volumes—importing countries beyond that threshold face 50 percent duties. Prime Minister Carney also warned of additional counter‑measures if no agreement is reached by a July‑21 deadline, emphasizing flexibility depending on progress.

2. Suspension of selective tariffs

On April 15, 2025, Ottawa announced a suspension for six months of retaliatory tariffs on key U.S. imports critical to Canadian manufacturing, healthcare, food processing, national security, and public safety. Automakers who continue production in Canada were exempted from punitive tariffs.

3. Financial support: LETL facility

To assist larger companies facing trade-related liquidity pressures—including Algoma Steel—Canada launched the Large Enterprise Tariff Loan facility in March 2025. It provides bridge financing to eligible firms while trade talks continue.

4. Engagement and negotiation

Prime Minister Mark Carney has adopted a diplomatic yet firm posture—negotiating directly with U.S. counterparts, calling for a renegotiated trade deal and rejecting unilateral tariff actions. In a meeting with Trump, Carney stated, “Canada will never be for sale,” and insisted only a fair, durable agreement is acceptable.

How successful have these efforts been?

Positive indicators

1. Financial relief in motion: Algoma Steel’s application to LETL and other firms' enrolment in government supports show that Ottawa’s financial tools are actively helping companies ride out near‑term uncertainty.
2. Diplomatic traction: Cancelling auto tariff deadlines and negotiating through crisis, Carney’s leadership appears to have paused the worst-case expansion of tariff rounds—for now staying trade escalation from spiraling further.
3. Limited domestic fallout from exemptions: Suspension of select retaliatory tariffs—especially for automakers and manufacturing inputs—has softened the blow to domestic suppliers.

Lingering challenges

1. Industry dissatisfaction: Canadian steel producers have stated government measures “aren’t enough” to prevent job losses or stop steel dumping from other nations. Indeed, roughly 1,000 jobs in steel have been lost since tariffs began.
2. Continued closures of U.S. market: Algoma reports that export access remains blocked—meaning government supports are a lifeline, not a long‑term solution.
3. Trade talks remain fragile: Negotiations with the U.S. remain “chaotic” and one‑sided, with no guarantee of comprehensive agreement by deadlines; investment decisions and supply‑chain adjustments continue to be delayed.

Looking ahead: balancing optimism with realism

As a financial advisor—and someone personally invested in our community—I remain cautiously optimistic. Ottawa has moved swiftly to cushion the immediate fallout: targeted tariff suspensions, liquidity support programs, and measured diplomacy. For Algoma Steel, that means meaningful engagement and financial relief are available, and capacity to pivot toward domestic demand and new markets is growing—but challenges remain real.

Clients should consider:

• Diversification: Firms and investors exposed to steel or auto supply chains may reduce reliance on U.S. markets and seek new domestic or global customers.
• Government advocacy: Continued feedback loops between companies like Algoma and Ottawa will be critical in avoiding gaps in support.
• Monitoring trade deadlines: Immediate pressure points include any remaining U.S. deadlines for new deals post‑August 1, 2025—including the potential imposition of yet more tariffs.

Conclusion

In summary, the U.S. has sharply escalated tariffs—doubling to 50 percent for metals and raising some categories to 35 percent—placing pressure on Canadian exporters, especially steel producers like Algoma in Sault Ste. Marie. The Canadian government has responded with a mix of retaliatory duties, strategic suspensions, liquidity support, and diplomacy under Prime Minister Mark Carney. These efforts have provided valuable relief and a framework for negotiations, but structural risks remain. As your financial advisor, I remain hopeful yet vigilant: the path forward will depend on continued government responsiveness, corporate adaptability, and successful resolution of negotiations with the U.S.

Source materials

On August 1, 2025 tariff increase to 35 percent: ir.algoma.com+4Global News+4Delta Optimist+4 The Guardian[Reuters+4The Guardian+4 CTVNews+4|https://urldefense.com/v3/__https://www.theguardian.com/us-news/2025/jul/31/trump-canada-tariffs-order?
Doubling of metal tariffs to 50 percent in June 2025: TIME axios.com AP News
Algoma Steel comments and funding request: Global News, Delta Optimist
Canadian government support measures, quotas, and LETL: Reuters, Global News TT News canadianmanufacturing.com
Industry criticism and job impact: Reuters AP News