Stock markets initially fell a few hundred points after the U.S. went ahead with the tariff threat. However, by 3 p.m. on March 4, 2025, the Dow Jones, Nasdaq (QQQ), and S&P 500 (IVV) traded higher. Although the swift sell-off on higher relative volume in the last hour is a concern, investors need not worry.
Speculators may bet that President Trump is opening the negotiations with the highly punitive 25% tariff rate. The price shock for Americans, as trade partners respond like for like, will require the government to reconsider the tariff rate.
Enbridge (ENB) CEO Greg Ebel said that tariffs would not change the volume of crude U.S. imports from Canada significantly. It would take several years of a tariff in place for that to happen.
On Fox News, Commerce Secretary Lutnick said that Trump will work “something out with” Canada and Mexico. Still, Lutnick said that pausing the tariff is not likely. Readers may estimate that the final rate could be half, or at 12.5%. Currently, Trump set a 10% tariff on Canadian oil. A lower rate would help firms like Suncor Energy (SU) and Imperial Oil (IMO).
As the negotiations unfold, watch for an entry point in shares of Chevron (CVX) and Exxon Mobil (XOM). Any tariff rate decline would help the economy, which would increase demand for energy products.
