Canada just tapped out.
Late last week, Canada announced that it would NOT cancel the proposed collection of a Digital Service Tax (DTS) on U.S. tech firms. In its simplest rendering, starting Monday (today) Canada intended to hit U.S. tech firms with a 3% levy of any revenues generated from Canadian users above $20 million. The collection would be retroactive in nature, going back to 2022.
It was a bit of a “slap in the face” to the U.S. which was currently negotiating a trade deal with Canada. In response to this, President Trump ended ALL trade negotiations with that country via a furious post on social media.
Fast forward to today, and Canada announced that it is rescinding the digital service tax. Once again, a round of the “trade war” lasted less than 72 hours and was resolved with the other country tapping out to remain in the U.S.’s good graces.
How many times are the markets going to fall for this stuff?
Let’s cut through the B.S. here. The U.S. is the largest, most dynamic economy in the world. U.S. consumers account for nearly $20 TRILLION in spending power. And the entire world wants access to these wallets/ pocketbooks.
Put another way, no country wants to engage in a prolonged trade war with the U.S. This is particularly true now that we have two months’ worth of U.S. inflation/ GDP data showing that the trade war DID NOT trigger an inflationary spike in the U.S., nor did it trigger an economic contraction. It is clear the U.S. can weather any “hiccups” trade negotiations might cause, particularly now that the Trump administration has abandoned any pretense of austerity and is running the economy hot courtesy of Biden-esque deficits.
Put simply, the trade war is a non-issue for stocks investors and has been for weeks now. This is why the stock market continues to rally despite any trade related issues popping up whether they be with China, Canada, or someone else.
Those investors who panicked and sold during the various trade related issues since the April lows have missed out on extraordinary gains. After erasing $11 trillion in wealth during the first round of the trade war, stocks have steadily climbed a “wall of worry” rallying over, 1,000 points to close at new all-time highs last week.
And while the overall markets is up quite a lot, some stocks with specific qualities have done even better, more than DOUBLING in value from the April lows.
I detail four of them in a special investment report titled Tariff Proof Stocks: Four High Growth Companies Unaffected by the Trade War. Over the last month, they’re up: 22%, 32%, 40% and 100%.
To find out what they are, all you need to do is join our daily market commentary Gains Pains & Capital, and we’ll immediately send you a copy of Tariff Proof Stocks absolutely free.
To do so…
Best Regards
Graham Summers, MBA
Chief Market Strategist
Phoenix Capital Research
