What New Tariffs Mean for You and Your Investments

In April 2025, President Trump announced sweeping new tariffs on goods entering the United States. While these headlines may seem like just another political move, the ripple effects could impact nearly every American household, including yours. These changes have real consequences, from higher prices at the store to more market volatility in your investment portfolio.

Let’s walk through what’s happening, how it could affect the economy, and what smart investors should consider.

Tariffs are taxes placed on products made in other countries and brought into the U.S. When a product is imported, that tax is added, usually making it more expensive. The goal of tariffs is to protect American businesses by encouraging people to buy goods made in the U.S.

In April, President Trump introduced several new tariffs as part of a broader economic policy push. Here’s a breakdown of what was announced:

• A 10% tariff on all imports across the board (source)
• Tariffs over 100% on Chinese goods
• A 25% tariff on goods from Canada and Mexico (though this has been temporarily paused for 90 days to allow time for negotiations)
• Increased tariffs on steel and aluminum — core materials used in construction, vehicles, and clean energy projects (source)

You might be thinking: I don’t import products or run a global business — how does this impact me?

Here’s how it trickles down to everyday Americans:

When companies pay more to bring in goods, they usually pass those costs on to the consumer. That means you’ll likely pay more for things like clothing, electronics, home appliances, vehicles, and even groceries, because many of the items you use are either imported or made with imported materials.

Analysts at Yale and Wharton estimate that the average American household will spend an additional $3,000 to $4,000 per year due to price increases triggered by these tariffs (source, Wharton Budget Model).

In particular, prices on clothing could rise by 17%, and energy-related costs could spike because raw materials like steel are now significantly more expensive (source).

Tariffs don’t just affect what you pay at the store — they can also slow down economic growth. That’s already showing up in the numbers.

The World Trade Organization (WTO) has slashed its global trade growth forecast for 2025 from 3.0% to just 0.2%, pointing to U.S. tariffs as the main reason for the slowdown (source).

Meanwhile, the Penn Wharton Budget Model projects that these tariffs could cause a 6% drop in U.S. GDP over the long term and reduce wages by around 5% (source).

The same analysis suggests that a middle-income household could lose about $22,000 in lifetime purchasing power due to the broad economic effects of these trade changes.

Beyond the price increases and GDP headlines, investors should take note of the broader market impact.

When trade becomes more expensive and uncertain, many companies, especially those that rely on global supply chains, can see profits shrink. That can cause stock prices to drop, especially in sectors like technology, retail, auto manufacturing, and even clean energy.

For example, steel tariffs are expected to increase clean energy project costs by over $53 billion annually (source). Automotive prices are expected to rise due to more expensive parts, and consumer spending could slow down if households have less discretionary income.

As uncertainty builds, the stock market may experience more volatility, which can mean sharper ups and downs in your portfolio’s value.

This is a moment for level-headed thinking. While these shifts may sound concerning, the best investment strategies are built with uncertainty in mind.

If you’re a long-term investor, here’s what you can do right now:

• Don’t panic: Markets go through cycles, and well-diversified portfolios are designed to weather storms like this.
• Review your portfolio: Make sure you’re not too exposed to sectors that trade-related disruptions could hit hardest.
• Focus on quality: Companies with strong domestic revenues, minimal foreign supply chain risk, and healthy balance sheets may fare better in this environment.
• Talk to your advisor: If you haven’t had a strategy review lately, now is a good time.

President Trump’s tariff strategy marks a major shift in U.S. economic policy. It aims to bring manufacturing back home and correct trade imbalances. Whether it will succeed is still unclear, but in the meantime, it’s already affecting the cost of everyday goods, the global economy, and the financial markets.

The most important thing you can do as an investor is stay informed and disciplined. The headlines may be loud, but the fundamentals of smart investing haven’t changed: be diversified, invest for the long term, and lean on your advisor to guide you through times of uncertainty.

We deem the information provided to be reliable, however we cannot guarantee the accuracy of any outside information provided. Articles and posts contain information that are the opinions of the firm.

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