The world is watching, as Canada takes on the United States in a trade war battle royale of conflicting tariffs and counter-tariffs. Indeed, many other nations who may find themselves in line for such tariffs in the future are looking to Canada to see what happens when the tariffs land, and how to fight back. The world’s attention gave the iShares S&P / TSX 60 (IUTSF) a fractional boost in Wednesday afternoon’s trading.
From India to Belgium and beyond, the world economies are wondering where the next hammerfall will strike. But Canada is proving an instructive influence in how to fight back. For instance, as the tariffs started up, Doug Ford—Premier of Ontario—fired up a 25% tariff of his own on electricity going out to three states: Wisconsin, Michigan, and New York. That tariff ended up quickly suspended, though, as issues of costs to Ontario and the existence of long-term contracts came up.
But the move to hike electricity tariffs did have a more positive effect for Canada, as the United States’ plan to double tariffs on steel and aluminum in response was shelved in the wake of the electricity tariff’s cut. President Trump noted that he respected such a move, and the metals tariff was dropped to its original level. Brussels set up plans for tariffs on around $28.3 billion worth of United States goods. But Japan and South Korea, meanwhile, held off.
Games of Numbers and Brinksmanship
The immediate aftermath of the latest round of tariff squabbles has had some taking notice. A closer look at the tariff battle noted that Canada focused its own tariff efforts on products that had suppliers more readily available. For instance, United States dairy products could be replaced with Canadian ones. Florida orange juice can be Brazilian orange juice almost as easily; comparing oranges to oranges is an easy win.
However, Canada had some problems, especially when it came to household staples. Tariffs on plastic building materials, for example, did not have ready substitutes, and that meant a hit to the Canadian construction industry. Toilet paper tariffs were particularly hard-felt, especially after the pandemic’s toilet paper crunch. Leaving crude oil and natural gas out of tariffs, meanwhile, may have protected supply chains, but left a potential heavy blow to states like North Dakota off the table as well.
Is the iShares S&P / TSX 60 Index ETF a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on IUTSF shares based on 53 Buys, eight Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 19.13% rally in its share price over the past year, the average IUTSF price target of $30.55 per share implies 18.51% upside potential.
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