In this video, our Chief Investment Strategist Tasneem Azim-Khan unpacks the latest developments in Canada, the U.S. and the globe more broadly, including:

1. Tariff uncertainty remains: The U.S. granted a 90-day tariff reprieve to Canada, Mexico and China, and struck a trade deal with the U.K. But steel and aluminum tariffs increased from 25% to 50%¹, and a robust resolution with China has yet to be achieved. Uncertainty remains as the Trump administration remains unpredictable on trade.
2. The “Big Beautiful Bill”: In its current form, the “Big Beautiful Bill” could add nearly $5 trillion to an already burdensome debt load in the U.S. according to the Congressional Budget Office². The divisive bill is currently being reviewed by the U.S. Senate and adds another layer of unpredictibility.
3. Trump’s “revenge tax”: Section 899 of the “Big Beautiful Bill” has been coined the “revenge tax” – a new tax of up to 20% on foreigners with U.S. investments in countries with “discriminatory” tax policies³. This could mean more taxes paid for Canadians on passive income, including interest and dividends.
4. Rates on hold…for now: The Bank of Canada held rates at 2.75% in June⁴, with cuts expected later this year with a 2% to 2.25% rate possible to close the year⁵. Industry consensus expects the Federal Reserve to hold rates as well, with potential cuts to come in the fall as the Fed works towards its 25% to 4.5% target⁶. 
5. Markets resilient amid uncertainty: Equity markets in the U.S. and particularly Canada have been resilient, retracing losses experienced in April. We maintain a constructive view on equities, although Canadian and International markets hold attractive valuations relative to the U.S., in our view.

Considerations for investors

Uncertainty remains, which is understandably worrying for investors. Yet investment decisions made in a void of information and based on fear is not recommended when considering an investors long-term investment horizon and financial goals. Diversification across asset classes and geographies remains key.

For those investors that are particularly sensitive to volatility, staying invested remans key even if it comes with some modest reshuffling of your portfolio to address the current economic environment.

References

1. Steel tariffs increased from 25% to 50% on June 4th according to the BBC’s article titled “Trump’s 50% tariffs on metals come into effect”
2. The “One Big Beautiful Bill Act” would increase deficits $2.4 trillion over 2025-2034 according to the Congressional Budget Office article titled “Debt-Service Effects Derived From H.R. 1, the One Big Beautiful Bill Act”
3. Section 899, known as the “Revenge Tax” hikes levies for countries with “unfair foreign taxes” by up to 20% according to CNBC’s article titled “What a ‘revenge tax’ in Trump’s spending bill could mean for investors”
4. The Bank of Canada held interest rates at 2.75% in June according to CBC article “Bank of Canada holds interest rate at 2.75%”
5. According to a MoneySense article “Making sense of the Bank of Canada interest rate decision on June 4, 2025” current projections expect approximately two rate cuts in 2025 to bring the overnight rate to 2-2.25%.
6. The Federal Reserve’s interest rate target is 4.25% to 4.50%, with about 3 rate cuts expected by the end of 2025 according to US Bank article “Federal Reserve holds interest rates steady, while investors anticipate 3 to 4 rate cuts in 2025”

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