Canadians think Trump's tariffs are only going to get worse, poll finds

A Research Co. poll of 1,001 Canadian adults (Feb. 11–13, 2025) finds rising fear of U.S. tariff action—46% expect President Trump to raise tariffs (up 19 points since May) while only 20% expect rescission (down 20 points)—and broad economic anxiety with 76% viewing American tariffs as a threat. The survey reports consumer responses (55% boycott U.S. goods when alternatives exist; 34% cancelling U.S. trips, 30% avoiding American franchises), political fallout (Carney 57% approval on tariffs vs. Poilievre 30%), and regional/political splits (53% see the U.S. as a military threat; 60% of Liberal voters vs. 46% of Conservative voters), signaling reputational and demand risks for cross‑border sectors such as travel, restaurants, entertainment and forestry.

Analysis

Market structure: Tariff risk is a net negative for Canada-exposed exporters (autos, lumber, steel) and cross-border services (airlines, tourism) while benefiting domestic-substitute manufacturers, local retail chains sourcing non‑US goods, and FX hedgers. Expect downward pressure on TSX cyclicals (autos/suppliers, Air Canada AC.TO) and modest outperformance for defensive utilities (e.g., FTS.TO) and telecoms over the next 3–12 months as trade uncertainty compresses earnings multiple by 5–15% for exposed names.

Risk assessment: Tail risks include a targeted 10–25% tariff on autos or lumber that could shave 0.5–1.5 percentage points off Canadian GDP in a 12‑month window and trigger credit spread widening for provincial issuers. Short-term (days-weeks) volatility will spike around formal tariff announcements; medium-term (3–12 months) depends on legal WTO counters and US political calendar; long-term (>12 months) outcomes hinge on election results and supply‑chain re‑routing.

Trade implications: Immediate actionable plays are FX and short exposures to travel/US-franchise retail; consider USD/CAD appreciation and long Canadian sovereign duration as growth hedge. Options strategies to buy downside protection on TSX exporters and to express USD strength via 3‑6 month call spreads are efficient ways to limit cost while keeping upside optionality.

Contrarian angles: The market may be overpricing broad, sustained consumer boycotts—historically boycotts lower sales 2–5% and fade; durable mispricings could appear in mid-cap exporters forced to reprice assets. If CAD weakens >5% quickly, exporters’ CAD revenue recovers margins and some names (lumber/miners) may present recovery rebounds; monitor export volumes and Commerce Dept filings for inflection.

Key Decisions for Investors

• Establish 2–3% long position in FTS.TO (Fortis) as a defensive yield anchor over 3–12 months; expect relative outperformance if tariffs depress cyclicals and rates fall 10–30bps.
• Initiate 1.5–2% short equity exposure to AC.TO (Air Canada) via outright shares or buy 3‑month puts 10% OTM (size adjusted for liquidity); thesis: cross‑border travel down 20–35% among boycott cohort, hitting Q2–Q4 revenues.
• Implement a FX trade: buy a 3‑month USD/CAD call spread (long 5% OTM, short 10% OTM) sized to 1–2% NAV; add if USD/CAD breaches +3% from current spot, target payoff if tariffs announced formally.
• Pair trade: long 2% FTS.TO (utilities) and short 2% QSR.TO (Restaurant Brands International) for 3–6 months—RBI is exposed to US franchise sentiment and Canadian boycott risk while utilities are defensive.
• Buy 3–6 month put spreads on XIU (iShares S&P/TSX 60) 7–12% downside to hedge portfolio tail risk ahead of potential tariff rulings; reduce or unwind if tariff legislation is not filed within 60 days.