As tensions flare between the United States and China, the aftershocks of Donald Trump’s renewed trade war are being felt far beyond American borders. Stock markets around the globe have nosedived, and in Canada, the fallout is hitting especially hard—particularly among those nearing retirement.
Despite hopes for stability, the markets have taken a sharp downward turn in recent weeks following former U.S. President Donald Trump’s re-election campaign announcement that promised a return to aggressive trade tactics. His threats to reintroduce sweeping tariffs on Chinese goods have rattled investor confidence and reignited fears of a full-scale global economic slowdown.
A Global Shockwave with Local Impact
Since the initial trade war began under Trump’s administration in 2018, the economic ripple effects have been undeniable. At its peak, the U.S. imposed tariffs on over $550 billion worth of Chinese goods, while China retaliated with levies on $185 billion in American imports. These protectionist policies disrupted global supply chains and diminished trade volumes worldwide.
Now, in 2025, the looming threat of a second round of trade hostilities has sent stock markets into freefall. On April 15 alone, the TSX dropped 3.4%, while the Dow Jones Industrial Average fell over 900 points. Meanwhile, Asian and European indices followed suit, reinforcing investor anxieties.
Canadian Retirement Dreams at Risk
For many Canadians, the most personal blow comes not from tariffs or trade routes—but from plummeting retirement portfolios. RRSPs, TFSAs, and company pension plans are heavily invested in equity markets, both domestic and international. As those markets tumble, so too does the financial security of millions of Canadians.
According to RBC’s latest retirement readiness report (April 2025), over 62% of Canadians aged 55 and up now fear they won’t have enough saved to retire on time—up from just 47% a year earlier. A significant driver of this change is the sudden market instability triggered by geopolitical tensions.
A retired teacher from Vancouver, Janice Morrison, shared her concern: “I watched 10% of my RRSP evaporate in the past month. I was planning to downsize and retire by summer. Now, I may have to work part-time just to stay afloat.”
Trade Uncertainty Threatens Canadian Business and Jobs
It’s not just individuals feeling the squeeze. Canadian exporters, particularly those in agriculture, automotive, and technology sectors, are deeply intertwined with global trade networks. When U.S.-China relations sour, Canadian businesses are often collateral damage.
In a March 2025 briefing, the Canadian Chamber of Commerce noted that nearly 40% of Canadian companies are “highly vulnerable” to disruptions in U.S.-China trade relations. Small and medium-sized enterprises (SMEs), which make up over 98% of Canadian businesses, are least equipped to navigate prolonged uncertainty.
For example, Prairie grain exporters who rely on seamless international shipping have seen contract delays and rising costs as supply chains once again seize up. With fewer international buyers and higher overhead, layoffs may become inevitable.
Lessons from the First Trade War
Looking back, the 2018-2020 trade war caused a 1.2% decline in global GDP, according to the IMF. Canada saw its GDP growth drop from 2.1% to 1.3% in 2019, largely due to reduced export demand and investor uncertainty.
History may now be repeating itself, with compounded impacts post-pandemic and amid fragile supply chains. The Bank of Canada has signaled it may pause interest rate reductions if inflation rises due to trade disruptions, further complicating the economic picture.
What Can Canadians Do to Protect Themselves?
Amid the economic noise, there are a few clear strategies Canadians can take:
- Diversify retirement portfolios: Avoid over-concentration in equity markets by exploring bonds, GICs, and international ETFs that are less exposed to U.S.-China dynamics.
- Delay retirement if possible: Postponing retirement by even a year or two can allow more time for markets to rebound.
- Consult a financial advisor: Personalized advice can help mitigate losses and adjust risk tolerance as needed.
- Stay informed, not alarmed: Market downturns are part of the economic cycle. Long-term investing principles still apply, especially for younger Canadians.
A Call for Stability and Strategy
Canada finds itself in a precarious position—heavily reliant on international trade, yet vulnerable to the political decisions of its largest trading partner. While Trump’s renewed trade war may be popular among segments of the U.S. electorate, its broader consequences are cause for concern north of the border.
Prime Minister Justin Trudeau has urged calm, stating in a recent press conference that “Canada remains committed to a stable, rules-based international trade system.” However, Ottawa may need to accelerate trade diversification efforts, particularly toward Europe and the Indo-Pacific, to reduce dependence on U.S.-China dynamics.
As markets continue to respond to political maneuvering, Canadians—especially those nearing retirement—must prepare for further volatility. The Trump trade war may be an American initiative, but its impacts are undeniably global. For Canadians, the stakes are not just economic—they’re deeply personal.
Stay connected, stay informed, and make decisions today that protect your tomorrow.
