More Tariffs, ‘Liberation Day’, and Elbows Up: This Month In Business and Finance
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Exactly how many times and for how long can anyone tolerate the word “tariff?”
Financial markets seemingly hit their breaking point in March as tough tariff talk continued to dominate financial markets and broader business and economic discourse, with market players - and company leaders, and everyday people - seemingly getting a better sense of just how disruptive President Donald Trump’s plans to impose widespread tariffs will be.
Indeed, from mid-January to the end of March, markets have gone from fist-bumping the “Trump bump” to hitting the “Trump dump” button on stocks and other investments amid growing anxiety over tariffs, trade wars, the waning possibility of short-term tax cuts and whether economic growth might actually stagnate or contract.
The shift in market expectations based on what Trump’s two core priorities appear to be – reshaping the global economic order and putting the American economy first by encouraging American companies to make stuff on their home turf – has turned the first quarter of 2025 from gain to pain for investors across the G7 and beyond.
Going into the second quarter, there is no clarity in sight. As Alpine Macro Chief Global Strategist Chen Zhao wrote in his most recent outlook, “What is not clear is the potential economic and financial market consequences from these various, and often conflicting, policy agendas.”
“Unlike former President Ronald Reagan who came to power in the early 1980s with a clear supply-side agenda of widespread tax cuts and deregulations, it is hard, even impossible, to generalize President Trump’s policy orientation,” wrote Zhao. “This is because many of his key policy agendas are either inconsistent or in outright conflict altogether.”
Of course, the month – and the quarter – wasn’t all tariff talk. Here are what we saw as the three top stories that dominated the business and market headlines.
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“Liberation Day”
One of the biggest stories to impact financial markets in March technically won’t be official news until April, despite causing markets to swoon through the end of the month.
Dubbed by Trump himself as “Liberation Day,” April 2 is the day Trump’s "American first" trade policy will go into full swing as he seeks to boost domestic manufacturing by making it more expensive for companies to ship products into the U.S.
Already Trump has imposed tariffs on goods from Canada and Mexico as well as China, as well as on all steel and aluminum imports, and foreign cars and auto parts. He's threatened several other countries including traditional allies in the European Union with other steep tariffs.
But that was only the warm-up act. While still shrouded in mystery, “Liberation Day” will purportedly mark the rollout of additional reciprocal tariffs, which will apply to countries that are the largest contributors to the $1.2 trillion U.S. trade deficit.
All of which has shifted investors’ expectations from what was expected to be a business, tax, and policy-friendly Republican era to what many strategists and economy watchers have never quite seen before - and don’t quite know how to position themselves for next.
Indeed, one of the negative outcomes of the policy direction, or lack thereof, was consumer confidence, which took a massive hit in March, exacerbating the stock market turbulence, which was characterized by a sell-off in growth stocks. The reason is fairly simple: few can figure out what precisely Trump’s long-term end game is.
One thing is for certain: investors are re-assessing their outlook for corporate earnings. More companies than usual are falling short of analyst expectations with their first-quarter earnings guidance. Of 107 S&P 500 companies issuing guidance for the first quarter, 68 have issued negative guidance, according to FactSet (FDS).
AI and tech
One clear victim of March’s uncertainty and volatility was technology stocks, with the group experiencing a collective loss for the month - and the quarter - on concerns that everything from AI development and rollout to chip production and sales to the number of new Tesla’s hitting the open road won’t be nearly as magnificent as investors are pricing in.
For the month, the Mag 7 performed mixed, dragged down by Tesla (TSLA) - so far this year, the group of stocks that also includes Alphabet (GOOG), Amazon (AMZN), Apple (AAPL), Meta (META), Microsoft (MSFT) and Nvidia (NVDA) has collectively lost more than 13.2%.
Investors with a longer-term view see the declines as a shift in market leadership - where value stocks are now expected to outperform growth stocks, which in turn has negatively impacted the technology sector, heavily populated with growth-oriented stocks. And leading the declines: all things AI, which the likes of Alphabet, Apple, Meta, and, of course, Nvidia, are heavily invested in.
Concerns over trade policies, particularly tariffs, played a significant role in the volatility of technology stocks, while investor anxieties about the pace of economic growth also contributed to the declines.
Not to be done in by a reset in how investors are valuing tech stocks, Elon Musk announced late Friday that he sold his social media site X, formerly Twitter, in a $33 billion all-stock deal to his own AI startup company, xAI.
The tech billionaire shared the news in a statement posted on X, writing, “xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent.”
“This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach,” Musk, 53, wrote in his announcement, adding that the merger will “allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress.”
Musk bought X for $44 billion in 2022, gutted its staff and changed its policies on hate speech, misinformation and user verification and renamed it X.
“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk said in a press release at the time.
Meanwhile, in Canada
As Canada’s relationship with the U.S. stands in tatters amid President Donald Trump’s trade war, and as Canadians prepare to vote on one of the most significant federal elections in the country’s history, one area of the Canadian economy is looking shockingly promising: fintech.
Indeed, while optimism among small businesses in Canada is at a 25-year low, regulatory developments as well as expectations of how both banking reforms and government responses to the U.S. tariff war are bringing cautious optimism to Canada’s fintech sector.
Canada now has oversight regimes for crypto-trading platforms and payments firms, and plans to launch open banking and real-time payments next year. Open banking would give fintechs a boost by granting them reliable access to banking data at a customer’s request to power applications like spending trackers and accounting software, while the Real-Time Rail will give fintechs direct access to a new piece of national payments infrastructure, according to TheLogic.
Canadian fintech has been rebounding since 2024. Investment reached a record US$9.5 billion last year, up from US$1.1 billion the previous year, according to data from PitchBook compiled by KPMG. Fintech funding in the country outperformed the sector globally last year, which saw investment drop, and also surpassed other tech sectors in Canada that continue to have difficulty raising funds, such as cleantech.
Despite what is expected to be a more favorable environment for fintech in Canada, some of the country’s long-standing leaders are subtly indicating they may finally have had enough.
E-commerce platform Shopify Inc.( SHOP), one of Canada’s rare bright stars in the international payments, technology and transactions space, recently listed a New York headquarters in a U.S. regulatory filing, stoking speculation about a U.S. move amid anxiety in Canada about capital flight south of the border.
The Ottawa-founded company filed a 10-K annual report on Feb. 11 to the U.S. Securities and Exchange Commission that mentions New York as a “principal executive office” alongside its Canadian address, suggesting to analysts at TD Securities (TSE: TD) that the company is considering moving towards a U.S. stock market listing.
Shopify also reordered how it reported segmented assets, “which flips the geographic breakdown” from majority Canadian to majority U.S.
To be sure, a big part of the future of Canada’s fintech ecosystem - and Canada’s future in general - will be decided at the end of the month when federal elections are held.
