Canada, Mexico, China ETFs Dip on Trump Tariff Plan

ETFs tracking Canadian and Mexican companies fell after President-elect Donald Trump said he’ll impose 25% tariffs on products coming into the U.S. from those countries, as leaders from the U.S.’s biggest trading partners warned of damage to their economies. 

China-focused exchange-traded funds also fell after Trump said on Truth Social that he’d impose 10% duties on imports from China because of the country’s failure to stop “the massive amounts of drugs, in particular Fentanyl, being sent into the United States.” 

The three nations are the top U.S. trading partners, accounting for $190.6 billion, or 42% of all U.S. exports and imports in September alone. Trump blamed Canada and Mexico for not using their powers to stop a flood of illegal immigrants “bringing Crime and Drugs at levels never seen before” into the U.S., and said they’ll pay steep prices until they stem the flow. 

The largest Mexico-focused exchange-traded fund, the $1.23 billion iShares MSCI Mexico ETF (EWW), whose largest holding is Mexican bank Grupo Financiero Banorte, dropped 2.8% in afternoon trading Tuesday. The biggest Canadian ETF, the $7.61 billion JPMorgan BetaBuilders Canada ETF (BBCA), dipped 0.9%. Royal Bank of Canada is that fund’s top holding. 

The biggest China ETF, the $7.65 billion iShares Trust - China Large-Cap ETF (FXI), dipped 0.7%. 

Top ETFs focused on largest U.S. trading partners: 

Source: etf.com ETF screener

Canada, China, Mexico Respond 

Canada, which exported $29.2 billion into the U.S. in September, would work with the U.S. in “constructive ways,” Prime Minister Justin Trudeau said, according to BBC. Ontario premier Doug Ford said the plan would be “devastating.” Mexican President Claudia Sheinbaum said that duties will lead to inflation and job losses and she’s planning to write to Trump, Al Jazeera reported. Mexico exported $28.3 billion to the U.S. in September.

China disputed that it allows fentanyl components to flow into the U.S., the Guardian said. 

Last year, Mexico was the top U.S. trading partner, with nearly $798 billion in goods and services exchanged between them, according to USA Facts, a website founded by former Microsoft CEO Steve Ballmer. Canada, at $773 billion, and China, with $575 billion in services and goods, rounded out the top three.