Non-US stocks have delivered a positive return thus far in 2025, helping offset the US stock market’s disappointing start to the year. But some of the sources for these positive returns may be surprising to investors.
Potential fallout from tariffs has dominated the news cycle, and yet stocks of the primary targets for tariffs—Canada, Mexico, and China—are up for the year. A short sample for sure, but this echoes outcomes during Trump’s first term in office, when the Chinese stock market outperformed the US despite contentious trade discussions throughout those four years.
The lack of negative impact on tariff-target stock markets doesn’t mean investors have tuned out trade policy discussions. Market prices incorporate the aggregate expectations of investors. It could be that tariff developments thus far were in line with those expectations and therefore already priced in by the market.
Exhibit 1: Index Returns in Local Currency
Year to date as of March 7, 2025
Past performance is not a guarantee of future results. Actual returns may be lower.
Sources: MSCI USA Index, MSCI Canada Index, MSCI China Index, MSCI Mexico Index. Index returns are net dividends. MSCI data © MSCI 2025, all rights reserved. Indices are not available for direct investment; therefore, their performance does not reflect the expenses associated with the management of an actual portfolio.
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