##  [# ETF Spotlight: EWC Shrugs Off Trump's Canada Tariff Threats ](/sections/features/etf-spotlight-ewc-shrugs-trumps-canada-tariff-threats) 

 

# ETF Spotlight: EWC Shrugs Off Trump's Canada Tariff Threats 

 

 

Though Canadian ETFs declined Monday, they have more than recovered their losses.



 

 

 

 

 [![sumit](/sites/default/files/styles/author_image_icon/public/2023-03/Sumit_0.png?itok=SO-7S5SH "sumit")](/authors/sumit-roy) 

[By Sumit Roy ](/authors/sumit-roy)

 Feb 07, 2025

 Edited by: James Rubin

 

 

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The [**iShares MSCI Canada ETF (EWC)**](/ewc) was in the spotlight this week as trade tensions flared up.

With President Donald Trump threatening aggressive tariffs on Canada and Mexico, investors scrambled to reassess their exposure to Canada and Mexico-focused stocks.   
  
EWC, which offers broad access to Canadian equities, was caught in the crossfire. The [**iShares MSCI Mexico ETF (EWW)**](/eww) was also volatile.   
  
Trump’s proposed 25% tariff on all imports from Mexico and most imports from Canada rattled markets. Canada, a key US trading partner, relies heavily on exports to its southern neighbor, and sectors like energy, industrials, and financials could have suffered from significant ripple effects.  
  
But a crisis was averted Monday when Trump put his tariffs on hold for a month as he evaluated whether he could strike a grand deal with Canada. The newly elected president is looking to use tariffs to bludgeon Canada, Mexico and China into beefing up its efforts in combatting the flow of fentanyl into the U.S. The move is also part of a more aggressive approach to foreign policy that has unsettled investors fearful that a trade war will raise prices and undermine the US economy.   
  
“The Tariffs announced on Saturday will be paused for a 30 day period to see whether or not a final Economic deal with Canada can be structured,” Trump [posted](https://truthsocial.com/@realDonaldTrump/posts/113942189236610107) on Truth Social.

Canada promised to help the U.S. stop organized crime and fentanyl trafficking, a pledge that seemed to appease the US president—for now.

## EWC Rebounds After Monday Drop

EWC’s top holdings include the [Royal Bank of Canada (RY)](/stock/ry), [Shopify Inc. (SHOP)](/stock/shop), [Toronto-Dominion Bank (TD)](/stock/td), [Enbridge Inc. (ENB)](/stock/enb), and [Brookfield Corp. (BN)](/stock/bn).  
  
The exchange-traded fund dropped 1.6% Monday but subsequently rebounded to close 0.14% higher. In fact, despite the tariff uncertainty, EWC is just 3.5% off its all-time high from December.   
  
That suggests that investors don’t believe that Trump’s tariffs on Canada will go into effect and that a deal will likely be struck.   
  
Still, with trade tensions back in focus, EWC is a key ETF to watch. Investors should brace for potential swings and keep an eye on policy developments in the weeks ahead.

 
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 [ Sumit Roy Senior ETF Analyst ](/authors/sumit-roy) 

 

 

  Sumit Roy is the senior ETF analyst for etf.com and author of (Don't) Invest Like a Pro. He creates a variety of content for the platform, including…   [View Bio](/authors/sumit-roy)

 



 

 


 Related Topics  [Equity](http://www.etf.com/topics/equity) 

 [Canada](http://www.etf.com/topics/canada) 

 [Mexico](http://www.etf.com/topics/mexico) 

 [S&amp;P 1000 Index](http://www.etf.com/topics/sp-1000-index)