Global markets are trying to stabilize after renewed U.S. tariffs on Chinese imports sparked a pullback and reignited concerns about the global trade outlook. Rising geopolitical tensions and signs of slowing growth have investors turning more defensive as earnings season approaches.
BNN Bloomberg spoke with Colin Stewart, CEO and portfolio manager at JC Clark, about the potential fallout from tariffs, why he favours Canadian equities and real estate, and how investors can navigate the latest wave of market volatility.
Key Takeaways
- North American economies remain resilient but show signs of slowing growth and a softer labour market.
- New U.S. tariffs on Chinese goods could weigh on corporate margins, consumer demand and global trade flows.
- Rising policy uncertainty and trade tensions may push investors toward defensive positioning.
- Canadian equities offer stronger value with lower valuations and higher dividend yields than U.S. peers.
- Real estate is regaining appeal as lower rates improve refinancing prospects and long-term demand drivers strengthen.
Read the full transcript below:
ANDREW: Let’s get more on the markets. We’re joined by Colin Stewart, CEO and portfolio manager at JC Clark. Colin, thanks very much for coming on the show. We’ve seen some weakness today in U.S. stocks, with trade once again playing a role.
COLIN: Nice to be with you, Andy. I think the volley we saw from China last week on rare earths, along with the U.S. administration’s threat to impose 100 per cent tariffs on Chinese goods, marks another flare-up in trade tensions between the two countries. China is a major trading partner, so that’s clearly a concern for markets.
There are a lot of moving parts right now, and the economy is showing some signs of weakening in North America — both in Canada and the U.S. The labour market has softened recently in the U.S., and one thing we’re watching closely, as I think other investors are, is how these tariffs are flowing through to corporate results as we move into third-quarter earnings.
When the last quarter was reported, it was still early days, and companies hadn’t yet dealt with tariffs for a full period. Now, with a full quarter of exposure, it’s unclear how that will affect margins, earnings and demand levels. It’s been our view — and still is — that someone ultimately has to pay for these tariffs. Despite what former president Trump says about foreigners footing the bill, we believe U.S. companies and consumers are also bearing the cost. That may already be showing up in some of the weaker economic data we’ve seen lately.
ANDREW: Trump’s also going after the big Chinese shipping companies — including COSCO and Orient Overseas — which now face billions of dollars in extra port levies.
COLIN: Exactly. It’s always been our view, and economic history supports this, that trade barriers and tariffs aren’t productive for the global economy. While there’s an intent to bring jobs and investment back to the U.S. — and we’ve seen some of that — the idea that only foreign firms pay the price is a false narrative.
Ultimately, it’s shared across the supply chain and consumers. That can either lead to higher prices and a resurgence of inflation, or more likely, weaker demand. Even major U.S. retailers like Walmart and Home Depot — which have significant bargaining power — have said they’ll need to pass along some price increases to consumers.
It’ll be very interesting to see in this earnings season how margins and consumer demand are being affected. With U.S. stock valuations near record highs, we’re cautious and think now’s the time for investors to be somewhat defensive.
ANDREW: Let’s put up a five-year comparative chart for the TSX Composite and the S&P 500. If you exclude dividends, both in U.S. dollars, the American market is up about 90 per cent over five years, almost a double. The Canadian market is up around 72 per cent — but because of our richer dividends, we’ve actually caught up with the U.S. market and even exceeded it when total return is included.
COLIN: That’s right, and part of that strength in Canada this year has been led by commodities and gold. But even with the recent outperformance, we still see better value in Canadian equities.
Canadian stocks trade at much lower price-to-earnings multiples than U.S. stocks, which gives investors a higher margin of safety. Many Canadian companies also pay attractive dividends. In this uncertain environment — with ongoing geopolitical tensions, sticky inflation, and the unknown impact of tariffs — we think dividend-paying and defensive sectors in Canada are a better place to be positioned.
If volatility continues in the U.S., as we saw late last week and again today, Canadian equities could offer a relative haven for investors.
ANDREW: One sector catching your eye right now, Colin, is real estate. Is that in Canada?
COLIN: Yes, exactly. Real estate has been out of favour for a while in both Canada and the U.S., largely because rates had been rising. But now it looks like interest rates are starting to come down. Lower rates are generally positive for real estate — they help reduce cap rates, lift valuations and allow companies to refinance debt more affordably.
It’s a sector that hasn’t performed particularly well, but we’re seeing signs of improvement in some Canadian names. We like areas such as apartment owners, land developers and self-storage. One company we particularly like is StorageVault Canada, which we think is well-positioned to benefit from population growth and lower borrowing costs.
ANDREW: Colin, thanks very much.
This BNN Bloomberg summary and transcript of the Oct. 14, 2025 interview with Colin Stewart are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
