If you are feeling uneasy about your investments based on the volatility of these policies, you are not alone. It has been analyzed, traded around, and priced in on Wall Street for months now, as it was well forecasted by the Trump administration during his campaign and when he was elected. Because of this, the potential effects of the tariffs are not of huge concern to ourselves and LPL research. The real concern would be surrounding events that are not being forecasted or that we are unaware at this point, such as black swan events. This is always the biggest concern for asset prices.
We understand that the the public perception and discourse of these moves can make it hard to see through the noise. As with any political and economic uncertainty, we'll get through it. The most important thing is that you stick to the financial plan we all work hard to lay out and execute.
Below are some points from our Macro Research Team at LPL that lays out what has happened so far, and what we are watching. This is not to say we are "pro-tariff" or we believe that this strategy is going to necessarily be a net positive, but it sheds light on the fact that we can't say with certainty what the outcome will be.
LPL RESEARCH MACRO STRATEGY TEAM:
- Over the weekend, President Trump unveiled a new set of tariffs targeting goods imported from Canada, Mexico, and China.
- The tariffs were set to be made effective after 12:01 a.m. on Tuesday, before Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau were each able to strike a deal with President Trump, delaying the start date by 30 days after productive talks between the governments on Monday.
- However, there was no reprieve for China following a conversation between President Trump and Xi Jinping, which led to the 10% levy on Chinese goods going into effect, and a Chinese tariff on U.S. energy products as well as an anti-trust probe into Google in response.
- This overall move to implement tariffs marks a clear shift in U.S. trade policy, and investors should be prepared for the possibility of additional tariff announcements. President Trump recently signaled that he may also implement tariffs on specific categories of goods, as well as the European Union (EU).
Here is a link to the full article from LPL Research: https://www.lpl.com/research/blog/tariff-turbulence.html
As always, if you have any individual questions or concerns, please don't hesitate to reach out.