Trump accuses China of taking over Canada and threatens sweeping tariffs — what rising trade tensions could mean for investors

China is Canada’s second-largest trading partner after the United States (3). During the visit, both countries reached a preliminary agreement aimed at lowering trade barriers, including reduced tariffs on Canadian canola and allowing a limited number of Chinese electric vehicles into the Canadian market at standard tariff rates (4).

As a result, Trump suggested that any deal allowing China to move products through Canada would be met with a 100% tariff on Canadian exports to the United States (5).

The comments quickly drew a response from Ottawa. Carney emphasized that Canada isn’t pursuing a free-trade agreement with China and has no intention of doing so. Instead, he said the goal of his visit was to resolve specific trade issues that had built up over the past several years, not to deepen economic integration with a nonmarket economy (6).

Dominic LeBlanc, the minister responsible for Canada–U.S. trade, also pushed back on Trump’s claims, stressing that the discussions focused on easing existing tariff disputes rather than shaping the nation’s broader trade strategy (7).

Even so, Trump continued to criticize Canada’s approach, warning that closer ties with China could damage the country’s economy and strain its most important trading relationship (8). His remarks underline how quickly political rhetoric can turn into real trade threats — especially during periods of global tension.

Trade disputes and the uncertainty that they create can affect prices, supply chains and business confidence. Tariffs raise costs for companies, which eventually show up in higher prices for consumers or weaker investment returns (9).

The episode serves as another reminder that global politics can move markets just as fast as economic data. When trade relationships become uncertain, having a diversified portfolio and exposure to assets that can weather volatility becomes even more important.

A time-tested safe haven

Investment experts often stress the importance of diversification — and for good reason. Many traditional assets tend to move together, especially during periods of market stress. When stocks fall, bonds don’t always provide the protection investors expect (10).

That concern feels especially relevant today. Equity markets have become increasingly concentrated, with a small number of large companies accounting for a disproportionate share of overall returns (11). At the same time, valuations remain elevated by historical standards, leaving some investors uneasy about relying too heavily on public markets alone.

As global tensions rise and major economies rethink their trade relationships, many investors look for assets that tend to hold their value regardless of what ebbs and flows the market is experiencing. One that continues to stand out is gold.

Gold has long been viewed as a safe haven because it isn’t tied to any single country, currency or government. Unlike paper money, it can’t be created at will. During periods of economic stress, inflation or geopolitical conflict, investors often move money into gold as a way to reduce risk — which has allowed the precious metal experience a 63% surge in value over the past year alone (12) (13).

For Canadian investors, gold is often used as a diversifier rather than a growth engine. It doesn’t produce income like stocks or bonds, but it can help balance a portfolio when other assets struggle. That’s why many portfolio managers suggest holding a modest allocation, especially during periods of heightened global turbulence.

You can access gold in several ways, including physical bullion, exchange-traded funds (ETFs) and shares of mining companies. Each option comes with different risks, costs and tax considerations, making it important to understand how gold fits into an overall investment plan — not why it feels safe in the moment.

The asset that built the Trump fortune

If gold is considered the hedge during moments of chaos, real estate is the long game. But in Trump’s case, it wasn’t an asset class he built from scratch — it was one he inherited (14).