"Investors are nervous" - Shark Tank's Kevin O'Leary explains why the market dropped 700 points

Shark Tank investor, Kevin O'Leary, addressed the current market tensions in one of his recent posts on Instagram. He talked about how unresolved trade issues are causing the market to drop, particularly concerning Canada. Due to this, investors are growing increasingly nervous over trade tensions and energy tariffs.

The latest selloff saw the market drop 700 points, which indicates the mounting anxiety that the traders have over economic stability as well as future trade agreements.

One key area of concern is the unique trade relationship that Canada has with the United States. Kevin explains that while some countries face broad trade imbalances with America, Canada's deficit is mainly because of the energy sector.

He revealed that the country imports large amounts of oil from Alberta, Saskatchewan, and the East Coast, making energy a central issue in the broader trade debate.

Captioning his post, the Shark Tank investor remarked,

"Markets hate uncertainty. Tariffs, trade wars, energy costs—it's all connected. Canada’s trade situation is part of a bigger mess causing volatility. Without leadership up north and with energy prices in play, investors are nervous."

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Shark Tank investor Kevin O'Leary talks about trade uncertainty and energy concerns

As for the energy sector, Kevin O'Leary, the Shark Tank investor, pointed out that Danielle Smith, the Premier of Alberta, had already navigated the trade situation when she went down to meet Donald Trump before he became President.

O'Leary revealed that "she's got the biggest trade deal with the United States in oil, 300 plus billion a year." Even though she faced open criticism for engaging with former President Donald Trump before the elections, her actions have positioned Alberta in a favorable trade negotiation.

"... She took a tremendous amount of heat by going down to see Trump just before he became President in Mar-a-lago. But she's the only one that's a winner right now. She's got a 10% tariff, not 25% on all the rest of the sectors. But if you really think about the Canadian situation, if you just take oil out of the equation, there's no trade imbalance."

As for energy, it is still a huge point of contention as Kevin highlights a huge tariff measure in oil imports. He says that a sudden spike in energy prices would add to the inflationary pressure, which would further make the markets volatile.

The Shark Tank investor noted that one of the factors that is also affecting the whole scenario is a lack of leadership in Canada at the moment. However, he claims that it will be resolved soon, within "90 days" as a new government is elected.

"And I'm sure, once there's leadership in Canada in place, which is days away now to the election, this thing will get worked out. So, it is not in anybody's benefit to have a trade war with a giant trading partner in energy and cars and everything else, particularly when there really isn't a deficit out of the energy at a $13 value discount."

The Shark Tank investor also noted that if a huge tariff is placed on Canada, this could affect the energy prices in the US and in turn, give rise to inflation, which is already high right now. However, he is hopeful that the "Canadian deal is gonna get worked out" and asks the viewers to wait for the "next 90 days." He called it the "NAFTA Three accelerated."

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Shark Tank season 16 episodes are released weekly on ABC at 8 PM Eastern Time on Fridays. They are later available to watch on Hulu.