This publication outlines strategic considerations for Canada’s financial institutions to navigate the current trade tariffs environment. Expanded U.S. tariffs have increased market uncertainty and systemic risk, especially in trade-sensitive regions and sectors. Institutions must update risk frameworks and prepare for adverse scenarios. Canada is diversifying trade and aligning regulations to lessen shocks. Recommended actions include:
- scrutinizing credit exposures in trade-sensitive sectors,
- expanding risk-sharing arrangements,
- reinforcing capital buffers,
- hedging currency volatility, and
- broadening investment portfolios.