MARKET PERSPECTIVE
By J Mulraj
Feb 7- 16, 2026, 2026
Image created using Raphael
Ninety years after Dale Carnegie’s famous book ‘How To Win Friends and Influence People’, Donald J. Trump has flipped the script. Whilst Carnegie’s book has sold over 30 million copies and become a best seller, DJT’s imaginary book, ‘How to Lose Friends and Alienate People’ may require a best cellar to digest!
Trump has alienated Canada far too often, in his quest to squeeze additional tariff income from Canadian exports to USA. This, so as to allow USA to pare its $38 trillion debt, the highest debt burden of any country. His remarks against Canada, with which the US shares the longest open border (8891 kms), through which trade and people have been passing through, are, frankly, distasteful. In fact, way back in Dec 2024, he had the temerity to suggest, unwelcomingly, that Canada consider becoming the 51st State of America. It was, obviously, greeted scornfully by proud Canadians, and promptly led to a consumer boycott of American bourbon and other products.
Trump’s foreign policy was the title of his imaginary book “How to Lose Friends and Alienate People”.
Trump levied a tariff rate of 25% on Canadian products, later raised to 35%. Canada responded with a rate of 25% to be levied on Canadian $ 30 of US products, with plans to raise this to C$ 135 b. To reduce dependence on America, it developed alternative markets for its copper, aluminium, lumber and uranium exports. Canadian tourists sought other destinations, impacting US border towns hard.
Canada signed agreements with UK, EU, Australia for sharing intelligence, and has sought and developed closer ties with China, especially for electric vehicles. Canadian and American auto industries are joined at the hip, with auto parts Cris’s crossing the border several times during the manufacturing process.
In March, Ontario Premier, Doug Ford, imposed a 25% tariff on electric power exported to USA, sharply spiking power costs, by $ 300000-400000 daily, until a deal with Commerce Secretary Howard Lutnick, led to a temporary suspension of the tariff hike.
As per this video Trump has signed an Executive Order freezing Canadian financially assets. Half of Canada’s Pension Fund assets are invested in America. Canada is already talking to other countries to divert their pension funds them, who will gladly welcome the investment. Then, Trump can only claim a Phyrric victory.
Despite the fact that USA is heavily dependent (>90%) on imported potash from Canada, Trump has, foolishly, raised tariffs on Canadian potash imports. This is masochism, not strategy.
Other countries, too, are distancing from USA. Sweden’s largest pension fund, Alecta, has cut its US Treasury exposure, citing policy uncertainty.
Recently, a US- India trade deal was announced, resulting in the cancellation of the 25% additional tariff on India for buying Russian oil. Though it was a framework for a future agreement, Trump incorrectly announced that India had committed to buy pulses from America and had also committed to investing $ 500 b., over time, in USA. Both of these were later withdrawn. (Remember that, when announcing the US- Japan trade deal, Trump had stated that Japan would invest $ 600 b. in USA, with 90% of profits accruing to America! That never happened, did it? It was bluster.
Trump should realise that trust matters. It is built up slowly, over time, but can be shattered in a moment. His bullying ways and aggressive demands does not endear him to others and will be very detrimental in future.
Especially so in the context of the US needing to roll over $9 trillion of maturing debt in 2025. Both foreign and domestic investors will demand higher interest to entice them to US Treasuries. Once US T- Bills were considered safe and liquid assets, but now other countries are selling the T-Bills.
Last week the BSE Sensex closed closed at 82626, down 954 points over the week.
The coming week could be more volatile, especially if, after Israeli PM Netanyahu met with Trump, they have decided to launch an attack on Iran. Iran will use asymmetrical warfare, launching missiles and drones to attack US military vessels, and will blockade the Persian Gulf, through which 30% of crude oil passes. That would spike the price of crude oil, and significantly impact global GDP growth.
Equally impactful, over a longer term, will be the consequence for various jobs, by AI that is self-learning and improving, at a fast pace. As explained in this must read article.
As the lyrics of Bob Dylan’s song, ‘Blowing in the Wind’ asks:
Yes, and how many times must the cannonballs fly, before they are forever banned? The answer, my friend, is blowing in the wind.
Sometimes one hopes it’s not a windy day, and one could get the answer.
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Comments may be sent to: jmulraj@asiaconverge.com
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