Monday Market Minute | Aug 25, 2025

Trade policy uncertainty lingers — markets price in a prolonged adjustment

What Moved

Eight months into the tariff saga, a notable shift occurred in market sentiment. The initial expectation that tariffs would be quickly negotiated away had given way to a more sober assessment: trade friction between the US and Canada was structural, not transactional. Business surveys showed that companies were no longer treating tariffs as a temporary disruption but building them into long-term planning. Supply chain restructuring accelerated, with Canadian manufacturers investing in domestic sourcing alternatives and reducing US dependency where economically feasible.

Why It Matters

The psychological shift from "this will resolve soon" to "this is the new normal" had profound implications for private markets capital allocation. Investment committees that had paused deployment pending trade clarity began releasing capital under the assumption that uncertainty was permanent. Private credit managers adjusted underwriting models to incorporate tariff costs as ongoing operating expenses rather than one-time shocks. PE sponsors began valuing supply chain resilience as a premium attribute in target companies. The adaptation was healthy — it replaced paralysis with actionable risk management.

Signal to Watch

The September G20 meetings and bilateral discussions on the sidelines would test whether political will existed for meaningful tariff reduction or whether both sides had settled into an entrenched posture.

The Monday Market Minute is published weekly by Alts Insider for educational purposes only. It does not constitute investment advice. See our full disclaimer.