Tariff Target Markets. By Wes Crill, PhD

The US market has had a disappointing start to 2025 amid a slew of new tariffs being imposed on some of the nation’s largest trading partners. For global investors, these losses have been somewhat offset by positive returns in many non-US markets. A few of these markets that have started 2025 strongly may be surprising to investors.

Potential fallout from tariffs has dominated the news cycle, and yet stocks of the primary targets for tariffs—Canada, Mexico, and China—are up for the year. A short sample for sure, but this echoes outcomes during Trump’s first term in office when the Chinese stock market outperformed the US despite contentious trade discussions throughout those four years.

The lack of negative impact on tariff target stock markets doesn’t mean investors have tuned out trade policy discussions. Market prices incorporate the aggregate expectations of investors. It could be that tariff developments thus far were in line with those expectations and therefore already priced in by the market.