Ahead of new reciprocal U.S. tariffs expected next week, one policy expert says he thinks Canada will avoid the worst-case scenario and the pull back in equity markets is overdone.
On April 2, U.S. President Donald Trump is expected to introduce sweeping new reciprocal tariffs, coupled with tariffs on Canadian and Mexican goods that were previously delayed. In an interview with BNN Bloomberg Wednesday, Charles Myers, the chairman and founder at Signum Global, said it can be difficult to predict exactly what will happen as Trump presents a “moving target” with new information presented “almost daily.”
“Here’s where we think we’re going to land on April 2nd. The current 25 per cent tariffs on steel and aluminum that went into effect two weeks ago remain in effect. That’s a blanket global tariff. It looks like we’re going to get a 25 per cent tariff on copper imports, again a blanket tariff,” he said.
Earlier in March Canada levelled reciprocal dollar-for-dollar tariffs on U.S. steel and aluminum imports in response to Trump’s 25 per cent tariffs that came into effect that same day.
Myers said that there are still ongoing negotiations, but he thinks the European Union will be hit hardest on April 2, with potential tariffs on things like luxury goods and aerospace parts and more.
“Unfortunately, the area that gets hit the hardest though will be the EU, U.S.-Canada, U.S.-Mexico, we will figure it out,” he said.
As trade rhetoric has escalated, Myers noted that a Canadian delegation has met with U.S. Commerce Secretary Howard Lutnick and other officials several times.
“I think that on April 2nd we’re going to find out that a lot of it was resolved, especially everything that is USMCA compliant,” he said adding that some Canadian consumers may choose to continue to boycott U.S. products.
Myers noted steel and aluminum tariffs may stay in place as they are a global tariff, along with possibly copper, but he thinks Canada and the U.S. are “going to find a way to de-escalate this.”
“I’m very optimistic on the U.S.-Canada relationship going forward. This is a trade hiccup. We will figure it out,” he said.
Market, recession fears
Given Myers optimism that many of the trade issues will be resolved, he said much of the pullback in U.S. equity markets due to tariff fears is “overdone” adding the outcome will likely be “more benign than I think what’s priced in today.”
“I think that we’re going to look back on this pullback, (a) painful pullback, but as a correction and a buying opportunity in what is otherwise a bull market that’s very intact,” he said.
On Tuesday, U.S. stock markets closed slightly higher and have recovered part of their losses since falling 10 per cent below all time high levels previously in March. The decline marked the first “correction” since 2023.
“The markets priced in an incredibly benign tariffs scenario early in this administration, Trump’s coming somewhere in the middle I think that is now priced in, this middle scenario it’s not totally benign, but it’s not the maximalist either,” Myers said.
“It’s something that both the U.S. economy and I think the counterparties’ economies can absorb.”
Despite fears around economic growth in the U.S., he said he believes the risk of a recession is lower than what’s priced in.
“I don’t think we’re heading into recession. It’s a little bit of slightly softer data, but from here the markets are going to pivot to what (U.S) Congress is literally starting to work on, which is very positive, tax cuts (and) deregulation from the administration,” Myers said.
U.S. President Donald Trump’s reciprocal tariffs on trading partners are set to take effect on April 2, a day he has proclaimed as “Liberation Day” for American trade. CTV News will have extensive coverage across all platforms:
- CTVNews.ca will have in-depth coverage, real-time updates, and expert analysis on what the tariffs will mean for Canadians.
- CP24.com will report on any developments out of Queen’s Park and what the tariffs means for the people of the GTHA.
- BNNBloomberg.ca will explain what this means for the business community, investors, and the market.
