Trump is considering three tariff proposals ahead of a Wednesday announcement. The options include blanket 20% tariffs, a tiered system with different rates, or country-by-country tariffs.
An official noted that the blanket tariff is deemed less likely. The focus appears to be on country-specific tariffs, with pharmaceutical and semiconductor tariffs set to be announced later.
Targeted Tariffs And Strategic Shifts
Tariffs on Canada and Mexico regarding fentanyl are expected to be lifted, while secondary tariffs on Venezuela will be implemented. Auto tariffs are also scheduled to be enacted.
There may be additional tariffs introduced later, suggesting potential flexibility for negotiation. This development is impacting stock performance and influencing USD/CAD values.
In short, there are three main tariff strategies being reviewed for announcement midweek. A flat tariff of 20% on all imports was initially floated, yet it’s now being reported as the least preferred option. Instead, there’s growing attention on setting different tariffs depending on the country of origin. Already, there are moves towards introducing sector-based measures, particularly targeting pharmaceuticals and semiconductors, with announcements expected shortly.
The aim seems less about broad economic leverage and more about applying pressure through targeted industrial and geographical measures. Tariffs on Canada and Mexico will be withdrawn, but only in areas tied to fentanyl, which marks a deliberate shift in tone for trade partners closely linked with US supply chains. In the other direction, new measures on Venezuela appear locked in and are expected to follow through without delay. Tariffs on automobile imports have been scheduled and may begin taking effect sooner than expected.
Market Reactions And Forward Risks
There’s also a suggestion that these steps are only the beginning. The structure appears deliberately modular. That gives space for back-and-forth in the coming months, which oftentimes reflects either upcoming negotiations or a trial of market response. Now, we’re already seeing impact ripple out—equities are reacting, and the Canadian dollar has shifted against the US dollar, both realigning in tandem with these shifts in trade tone.
So what do we take away? There’s a pattern emerging. The moves are clearly not random. Each targeted step presses on parts of the economy where policy overlap is difficult to avoid. That gives us some insight into where pressures may mount across international sectors. If a headline breaks—say around semiconductor tariffs—traders can expect ripple moves across industrials and key currency pairs.
Given this, it’s important to track which sectors are exposed to retaliatory action, and also how regional economies with trading dependencies may reprice their risk. For those trading forward curves and long-dated contracts, hedging against wider fluctuations in trade-related sectors might make increasing sense.
The US position is becoming clearer day by day. Watch where the flexibility in tariff timing appears—often those delays offer hints as to which parts might later be softened or could shift onto other sectors entirely. Sudden announcements may move underlying volatility without any early indicators, especially when paired with political cycles or upcoming negotiations.
It helps to stay alert for which tariffs roll out quickly and which ones repeatedly face delay. When measures pass unhindered, as is the case for auto imports and Venezuelan sanctions, it tends to suggest higher stickiness, and this may affect where firms direct production over the quarter.
We find that as these rules shift in real time, there’s limited benefit in reacting solely to press releases. Past experience tells us secondary measures often land beneath headlines and move more quietly through markets. Positions involving broad multinational exposure, especially in commodities and manufacturers, might reflect those pressures through widening spreads or tighter cross-currency hedging.
It’s especially worth noting that with forex pairs such as USD/CAD already moving, the sharper shifts may come earlier than consensus suggests.
