Three Things We’re Watching This Week

Let's dig deeper into the three things on our radar this week.

1. Auto industry D-day

The world may look back on April 3 as one of the most important days in the history of the auto industry. That’s when the U.S. levied a 25 per cent tariff on imports of foreign vehicles and certain auto parts, upending long-established supply chains and cross-border relationships. These duties will likely have a big impact on the sector and those looking to buy a new ride.

A recent report from RBC Economics & Thought Leadership¹ shared data indicating that Americans could pay up to $6,000 more for a car, while a report from McMaster University² said Canadian prices could climb as high as $8,000. The used car market could explode too, as buyers look for less-expensive vehicle options. Other potential impacts could involve higher auto-loan related delinquencies, said the authors of the RBC report – especially if prices more generally rise – and increased layoffs if demand for cars decreases.

What we’re watching out for: While the world waits to see what happens to the auto industry in the short term, the big question is what happens over the next few years, assuming tariffs stay in place. Will auto companies build more plants in America? What is Canada’s role in remade supply chains? To the former question, RBC Economics & Thought Leadership, in its auto report, said it isn’t sure whether auto manufacturing will ramp up. “While (reshoring) requires significant levels of capital investment, the more pressing concern here is long-term labour availability. The U.S. population is aging rapidly… in the long term, these labour supply constraints will weigh on the feasibility of introducing more factories. Weaker immigration alongside skills-matching and geographic constraints add to the challenge.”

2. Examining asset allocation
It’s been a highly volatile period for markets, and the ups and downs don’t just impact prices; they can also affect how you choose to allocate assets in your portfolio. For instance, say you held 60 per cent of your money in stocks and 40 per cent in bonds. If the stock market went down enough, you could find that much more of your money is in fixed income instead of equities now. The problem? Maybe you don’t want to be in a more conservative portfolio and would rather have more money in stocks to take advantage of a potential upswing. The opposite scenario could happen, too, where equity prices rise, and you end up with more money in riskier assets than you’d like.

What we’re watching out for: It might be a good idea to evaluate the need to rebalance your portfolio from time to time, including when markets shift. Check out this story on portfolio rebalancing for more information.


3. Investing Terms
Knowledge is power, and that’s especially true when it comes to investing. However, the finance world is full of weird, wacky and sometimes funny terms that can make it hard to understand what’s going on. For instance, bear market, a term that came into the mainstream in the 18th century, refers to when equities decline by at least 20 per cent from their most recent high. Penguin tariff? That’s a new one referencing the blanket 10 per cent tariffs the Trump administration imposed on most nations, including one only inhabited by penguins and seals.

With all that’s going on in the world, now’s the time to learn more investing language so you can make more informed decisions. Lucky for you, we’ve put together a list of terms that are getting bandied about (that means discussed frequently) these days.

What we’re watching out for: Every time markets get shaken up, whether on the downside or the upside, new terms get created or old ones come back into the lexicon to help make sense of what’s happening. We’ll keep an eye on any new words that pop up and share them with you, but if you see something and don’t know what it means, don’t be shy – look it up or ask a friend with some investment savvy. You might see a dead cat bounce, after all. (That’s when falling markets rise for a day and then drop again.)

Sources

^1. _{RBC Economics & Thought Leadership, "Five ramifications of the auto tariffs for the U.S. economy", March 2025}

^2. _{CBC, "Looking to buy a car? Expect higher prices under U.S. auto tariffs", April 2025}