Here Come The Tariffs...

Jeff Strasburg

April 03, 2025

Welp - here comes the elephant in the room.

Our commander and chief spoke yesterday about finally imposing the tariffs he has been enamoured with. It seems to be what everyone has been talking about recently. What percentage, which countries, which products, which industries, what time frame. It’s been exhausting.

Before yesterday, top to bottom, the stock market had only pulled back 10% this year, and the average pull back on any given year is 14%. So we didn’t think the market believed all the talk. But that changed yesterday (as I write this the futures for the S&P 500 are down 3.65%, brining it close to that down 14% number).

Our firm has a pretty optimistic philosophy, which has historically worked out well for our clients, but yesterday has many of the top analysts on wall street saying “the new tariffs are worse than the worst case scenario.” Gulp.

Most notably, the plan is to impose a 10% baseline tariff on all countries, with even higher rates on some nations in particular, like a 34% duty on China, 20% on the European Union and 32% on Taiwan.

Quite frankly, we can’t know with certainty what is going to happen, even after the announcement yesterday. From an economic standpoint, it is very hard to find highly educated economists that believe tariffs are a good idea. The handful of economists who do believe in their net benefit, are in Trump’s cabinet.

The question is whether the tariffs are actual policies, or political jockeying. Our hope is for the latter, meaning other countries will come to the negotiating table, ease some of their tariffs on our goods, or pledge investment in the states, causing the Trump administration to loosen up.

For the financial markets, stocks are down, interest rates are down, and global economic uncertainty is officially higher than COVID levels.

We are monitoring the situation closely and will reach out if we believe there is anything you should be doing. At this point it is a fool's game trying to make predictions, both in terms of which policies get implemented, and how the financial markets will react to these policy moves.

If you want to review your plan or discuss how these tariffs affect your situation in particular, please let us know and we will reach out.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.