Monday Market Minute | Feb 02, 2026

tariff shock rattles cross-border confidence — private markets gauge exposure

What Moved

The US-Canada trade war moved from rhetoric to reality this week as tariffs imposed under IEEPA authority continued to bite into cross-border commerce. The Canadian dollar weakened further against the greenback, reflecting deepening uncertainty about the duration and scope of trade restrictions. Equity markets whipsawed on conflicting signals from Washington, while bond yields dipped as investors sought safety. For private markets, the immediate concern is supply chain exposure — Canadian private equity portfolios with US revenue dependencies are repricing risk, and private credit managers are stress-testing borrower covenants tied to cross-border trade flows. Infrastructure funds with toll-road and logistics assets face revised traffic projections as goods movement slows at key border crossings.

Why It Matters

Tariff uncertainty doesn't just affect public equities — it ripples through private market valuations with a lag. Fund managers who underwrote deals assuming frictionless cross-border trade are now revisiting assumptions. For Canadian HNW investors, the key question is portfolio concentration: how much of your private allocation depends on US market access? The displacement is real, but so is the opportunity. Sectors insulated from trade friction — domestic infrastructure, healthcare real estate, Canadian-focused private credit — may see increased capital flows as investors rotate toward tariff-resistant strategies.

Signal to Watch

Watch the CAD/USD pair and Canadian manufacturing PMI over the next two weeks. A sustained dollar below 71 cents US signals that markets expect prolonged trade disruption, not a quick resolution.

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