There weren’t too many market observers who penciled in higher tariffs on Canada than on China, but that’s where things stood, at least for a few hours, before Trump struck a deal with Prime Minister Justin Trudeau yesterday. Who knows if a 25% tariff on Canadian exports will resurface in the coming weeks?

Many forecasts have been flipped on their head. China’s tariff tally appears to have landed at 10% for the time being. That’s not really all of it though; Chinese companies like Temu, the purveyor of cheaper-than-Amazon goods, had been able to avoid import duties by shipping directly to consumers, so long as the invoice was under $800. That loophole is going away.

Meantime, this weekend brought to fruition the threat of 25% tariffs on both Mexico and Canada, though cooler heads prevailed by the time Monday’s trading session came to a close. Trump cited the one-two punch of immigration and fentanyl as the catalysts, though the latter is primarily a southern border issue. Both Mexico and Canada have promised to beef up border security and scrutiny on narcotrafficking in exchange for Trump calling off the tariffs.

From an asset allocation standpoint, exposures to Mexico by American investors are generally not too heavy. With many emerging markets funds holding maybe 3-4% in the country, the ups and downs of the Mexican stock market are generally ignored by most. In contrast, sometimes developed markets funds may hold anywhere from zero to “wait, how much?” in Canada.

To wit, there is no “C” in EAFE, which stands for Europe, Australasia and the Far East in MSCI’s well-known developed markets index. As a result, many American investors pass the years with zero exposure to Canada, whether they realize it or not.

In contrast, large swaths of Vanguard’s, Schwab’s and State Street’s developed markets index trackers pick up boat loads of Canada in their baskets.

The FTSE Developed All Cap ex-US Index, which has billions in Vanguard money following it, has 10.5% in the country. A similar index, the FTSE Global All Cap ex-US Index, has 7.6% in the country. That makes Canada the third-largest exposure in both, behind just Japan and the UK. Notable heavyweights with lower weights include Germany and France.

Perhaps the best-known index provider is Standard & Poor’s. Their S&P Developed Ex-U.S. BMI Index has tracker funds that pop up in many portfolios that come across our desk. That one is pushing 11% exposure to Canada, making it again the third-largest country exposure.

If this week’s back-and-forth is the end of it, maybe a big Canada overweight will become a good thing as 2025 rolls on. But if all this turns out to be a rolling series of weekend spats, or if the mudslinging gets uglier, we suspect more than a few market players are going to take a deeper look at their portfolios. Many will come to realize they own a big bucket of Canadian stocks, whether they realized it or not.