tariffs & tariffs & tariffs…oh my
What a whirlwind the last few days have been for markets. There is not a whole lot that can be said that hasn’t already been said in the discourse. To put it mildly – wow. Not a single person knows how this is going to play out. For all the confidence coming from the current U.S. administration about how these tariffs are going to work – no one can articulate the ultimate end goal. What’s the vision? The desired outcome? Literally no one knows.
There are a few permutations of how we get out of this mess, but regardless, the landscape of the global economy will be forever changed because of these universal tariffs. Just so everyone is on the same page – a tariff is a tax to be paid on a particular class of imports or exports. And the United States just placed tariffs on every other country. The apparent goal here is to negotiate some form of reduced or free trade agreement with individual countries for specific goods and services, while reshoring manufacturing of certain industries back to the United States from countries that cannot or will not negotiate a trade deal. Again, this is speculative, because as mentioned above – no one really knows.
A reshoring initiative takes time. Offshoring manufacturing to other countries has taken place over the last 40-50 years. Realistically, it will take more than (roughly) four years for companies to purchase land, build factories, hire workers, and create a sustainable manufacturing base in the U.S. By that time, we will hopefully be well beyond this era of “reciprocity”. Plus, current domestic manufacturing practices rely mostly on automation – not people. So, again, if the end goal is to increase American jobs, this practice is highly unlikely to do so. In the meantime, we can expect even higher prices, reduced availability on many/most imported items, and more than likely, higher unemployment rates.
We can’t recreate the past. Upending the global order of the last several decades – one that Americans have largely benefitted from – to transport ourselves back to the 1970s is not only a bad idea from an economic standpoint, but delusional from a practical one. Every product-driven business in the U.S. will face some sort of obstacle in the near-term as a result. Start-ups will face heavy headwinds, and major corporations will deal with plenty of setbacks as everyone faces the unpredictability of these tariffs. In some ways this may be the next great equalizer – hitting startups and big businesses alike, no matter how much is in the bank.
While this is the most uncertainty we’ve collectively experienced since the pandemic, there are certainties that will materialize with time. The most important being that we will get through this. If you’re feeling scared or apprehensive about what might happen in the near future, that’s completely fair; however, we encourage you to not make big decisions due to short-term conditions.
So…what should you actually do right now?
Let’s start with what not to do:
Don’t panic-sell your investments. Yes – the volatility is extremely uncomfortable, but reacting emotionally rarely serves you well in the long term.
Don’t make big purchases or business decisions based solely on headlines. Breathe and take a step back. Trends may take a little while to reveal themselves.
Don’t fall for political fearmongering. There are a lot of loud voices out there right now. Frankly, most of them aren’t worth listening to.
Now what you can do:
Stay informed but set boundaries. Check the news, then go touch some grass.
Revisit your financial plan and make sure it’s built to weather the storm.
If you’re a business owner, try to build in some flexibility. Negotiate supplier relationships or reevaluate your pricing strategy if needed.
Most importantly: stay calm. Resilience isn’t just a buzzword – it’s a muscle you need to flex occasionally.
If you’re not sure where to start, try to block 15 minutes off to check on your finances. That’s it. Start there. Change is hard. Chaos is exhausting. This isn’t the end of the road, but it is a very annoying detour. What matters most is how you adapt. And if you’ve made it this far, you’re already doing better than you think. Keep showing up, keep adjusting, and don’t forget – this moment isn’t forever.
