Should I Invest in the U.S.? Tariffs, Trump, and the Ethics of Investing as a Canadian
Allow me to introduce Daniel—a 32-year-old single man living in Calgary, earning $105,000 per year. He contributes regularly to his TFSA and personal RRSP, and also to a group RRSP through his employer, who matches his contributions via a Deferred Profit Sharing Plan (DPSP). Daniel is politically aware, socially conscious, and fiscally responsible.
The Upsetting Realization
“Maybe I shouldn’t be investing in the U.S. at all.”
As have many Canadians, Daniel has been reading the headlines. The Trump administration is back with a vengeance, quite literally it seems, and new tariffs are being imposed, including on Canada.
He remembers the last time Trump was in power: insults to Canada in his description of then PM Justin Trudeau being “very dishonest and weak” following the 2018 G7 summit, instability in the markets provoked by his penchant for tariffs, including on aluminum just as the new CUSMA (Canada-U.S.-Mexico Agreement) was being negotiated, and the sense of being treated like a disposable ally in his “America First” doctrine that among other things, dismissed multilateralism.
A friend at Daniel’s place of work, who has the same troubling memories, just shifted all his U.S. investments to Canadian dividend stocks as an act of protest and financial caution.
Daniel feels torn. His investments include a U.S. Equity ETF, which he believes makes eminent sense given the significant role the United States plays in the global economy, but emotionally he doesn’t want to support a government with a leader who is not only disrespectful but a threat to Canada.
On top of all that, isn’t investing in the U.S. just rewarding a source of instability?
Daniel is facing a modern investor’s dilemma—ethical discomfort colliding with financial strategy.
The Deepening Dilemma
“Am I betraying my values—or sabotaging my future?”
Daniel’s values say one thing, but investment logic says another. Most globally diversified portfolios are heavily U.S.-weighted given the dominance of the U.S. in global securities markets. For example, VT, the U.S.-domiciled Vanguard Total World Stock ETF, has a 61.9% value composed of U.S. equities. In contrast, Canada makes up only 2.8% of VT’s portfolio composition.
If Daniel were to take the path of his friend and avoid U.S. equities altogether, it could mean more concentration in Canada’s narrow market which has about 32% in financial services, 16% in energy, and 13% in basic materials. This would mean missing out on innovative sectors like technology and healthcare. The consequences of such a choice are twofold. One is higher volatility because he has eliminated 60% of the global stock market and the second is likely to be lower returns over the long run.
Daniel doesn’t deny that this could be an emotionally satisfying choice and that it might feel principled, but on the other hand, continuing to invest in the U.S. feels like enabling bad behaviour.
Emotional tension: Daniel wonders whether his portfolio undermines the very values he tries to live by.
The Insight
“Maybe there’s a way to be both principled and prudent.”
An ethical response in Daniel’s investing behaviour doesn’t have to mean total avoidance. There are degrees of response he can take:
- He could lower his U.S. exposure, rather than eliminate it entirely.
- He could exchange a significant part of his U.S. investments for developed International markets. Many so-called “International Equity” ETFs in Canada track such indices. One of the most common is the MSCI EAFE (Europe, Australasia, Far East) Index, which tracks the stock markets of 21 countries, the top five of which are Japan, the United Kingdom, France, Germany, and Switzerland.
- Since Trump and his allies appear to be deliberately ignoring environmental issues, dismissing social concerns such as fair labour practices, diversity, equity, inclusion, and safety standards, and showing support for companies with poor governance records—including weak shareholder rights, questionable ethics, and a lack of transparency—Daniel may prefer to invest in a U.S. Equity ETF that emphasizes ESG-oriented criteria. This approach would allow him to maintain exposure to the U.S. market while symbolically “thumbing his nose” at Trump’s agenda.
Some steps Daniel can take to enact his ethical concerns include a review of:
- His group RRSP options. These are often limited by the choices available from the insurance company that the employer has chosen to administer the group plan, but there may be opportunities to tweak his holdings a little.
- His personal RRSP and TFSA holdings. Within these accounts, Daniel has full flexibility to choose his investments. And because both accounts are tax-sheltered, he doesn’t need to worry about triggering capital gains or losses when making changes.
Many investors appreciate the simplicity and diversification of asset allocation ETFs such as VEQT, XGRO, or ZBAL, which automatically spread investments across global markets. However, if Daniel prefers to avoid U.S. exposure entirely, he could build a portfolio using a Canadian equity ETF (e.g., XIC, ZCN, VCN) combined with an international equity ETF (e.g., XEF, ZEA, VIU). This approach still provides broad diversification while omitting U.S.-listed companies.
Another option is to focus on sustainable funds that include U.S. equities but apply ESG (Environmental, Social, and Governance) screening. For example, BlackRock’s iShares Sustainable ETF lineup includes asset allocation options like GEQT and GGRO, which emphasize companies with stronger ESG profiles. For those who prefer to build a portfolio using individual ETFs, iShares and BMO both offer U.S. equity ETFs with ESG filters, such as XSUS, XUSR, and ESGY.
- Investment is about stewardship—not just protest. While it’s natural to want to respond to troubling political developments with a financial boycott, it’s worth remembering that investing is fundamentally about stewardship. That means managing one’s resources wisely over the long term, not only for personal benefit but also in ways that can contribute to the broader good. Avoiding U.S. investments might feel like a moral stand, but it could also come at the cost of reduced diversification and potential returns. Instead, investors like Daniel might consider how to use their investment dollars to promote positive change, through ESG-screened funds, shareholder advocacy, or support for innovative, sustainable companies.
- Financial planning should reflect both goals and conscience. A solid financial plan aligns not only with a person’s financial goals, such as home ownership, retirement, or travel but also with their values. For someone like Daniel, who is politically aware and socially conscious, that might mean choosing investments that reflect his ethical commitments while still supporting his long-term goals. This doesn’t require perfection or purity, but it does invite intentionality. By working within the structure of a clear plan, Daniel can make room for both conscience and strategy—allocating a portion of his portfolio to ESG-oriented funds, for example, or excluding certain sectors—all while staying on track toward his financial future.
Conceptual breakthrough: Daniel doesn’t need to choose between being smart and being ethical. Thoughtful investing can do both.
The Creative, Redemptive Turn
“I can build a portfolio that aligns with who I am.”
To sort out his investing strategy in a manner that is consistent with his values, Daniel works with a financial planner to:
- Set an intentional asset mix (e.g., 30% Canada, 45% U.S., 20% international, 5% Emerging Markets). He uses individual ETFs for each category, so he has greater control over his investment options.
- Use his group RRSP to focus on broad-market growth, since he has limited options available to him, options which are even more limited with his employer-funded DPSP.
- Use his personal RRSP and TFSA to achieve his desired asset allocation in conjunction with his group RRSP and DPSP, including selecting an ESG-oriented U.S. equity ETF.
Daniel doesn’t react out of frustration; he plans with purpose.
Result: Daniel has created a diversified, principled portfolio that lets him sleep at night and grow his wealth.
The Resolution
“It’s not about perfection. It’s about intention.”
Investing isn’t about moral purity—but it can reveal our convictions. Investors like Daniel are right to ask hard questions. Political choices have consequences, and the Trump administration’s past actions, from slapping tariffs on Canadian aluminum to publicly belittling long-standing allies, have made many Canadians uneasy about continuing to invest south of the border. Choosing where to invest isn’t a question of moral purity, but it can reflect our convictions. Daniel may not be able to control U.S. policy, but he can choose whether to reduce or restructure his exposure to that market based on what he believes is right and what aligns with his long-term financial well-being.
Political climates shift, but stewardship remains. While it’s tempting to let short-term outrage guide financial decisions, the reality is that governments, and their policies, come and go. A wise investor navigates these changes with both clear-eyed caution and a long-term strategy. For Daniel, that might mean reducing U.S. holdings temporarily, focusing more on Canadian and international markets, or maintaining U.S. exposure but with safeguards in place. Whatever the approach, the goal is to steward his resources faithfully: to make intentional, informed choices that reflect both the world we live in now and the future he hopes to build.
An Invitation
What matters most to you in your investing? Does your portfolio reflect your convictions or merely follow the momentum of the market? Are you letting politics panic you, or are you planning with clarity? These are not easy questions, but they’re worth asking. As the landscape shifts, thoughtful investors like Daniel—and like you—can choose a path that aligns both with their values and their vision for the future.
This is the 291st blog post for Russ Writes, first published on 2025-06-02.
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