Monday Market Minute | Nov 17, 2025

Trade policy outlook for 2026 takes shape — partial normalization expected

What Moved

As 2026 planning began, a consensus formed around the trade policy outlook: partial normalization, not full resolution. Reports from Washington indicated that the administration was facing domestic pressure to moderate tariffs as import costs flowed through to US consumer prices. Canadian negotiators had secured meaningful sector-specific carve-outs for energy and critical minerals, with automotive parts negotiations advancing. The expectation was that the blanket 25% rate would be reduced to 10-15% on most goods, with key sectors receiving full exemptions over the next 12-18 months.

Why It Matters

The partial normalization thesis was actionable for private markets. PE deal committees began incorporating scenario-weighted tariff assumptions rather than binary "on or off" models. Private credit underwriters refined their borrower assessments based on sector-specific tariff trajectories. Infrastructure investors positioned for increased trade corridor investment as governments prioritized supply chain resilience. The shift from uncertainty to a probabilistic range of outcomes was itself a catalyst — it enabled the risk modeling and deal structuring that had been paralyzed by the binary unpredictability of early 2025.

Signal to Watch

The December bilateral trade meetings, coinciding with the BoC's final rate decision, would provide the clearest signal on whether partial normalization was achievable by mid-2026 or would remain aspirational.

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