Trump's Tariff Announcements
Jessica Amodio
Partner & Independent Financial Adviser at GDA
On the 2nd April 2025, US President Donald Trump announced a new set of tariffs with fresh import taxes on goods coming into America. This move has significant implications for various industries and the global economy.
In terms of what this means for investors:
Short-term impacts - industries directly affected by the tariffs, especially in the automotive and pharmaceutical sectors, will see the most immediate volatility. UK companies exporting to the US will be particularly impacted.
Long-term impacts - higher business costs can reduce profit margins or force price increases, lowering consumer demand. Economic uncertainty can also delay capital investments, slowing economic growth.
While tariffs pose challenges, historical evidence shows that well-diversified portfolios with appropriate risk management can weather the storm. Investing with a long-term outlook is the best way for you to reduce the impact of stock market fluctuations and to grow your investments over time.
“Ultimately, Trump is playing a high-risk game. He is risking stoking a fresh inflationary spiral in the hope that over time jobs and industry are restored to the US. This is following an election campaign where he promised to lower inflation and bring interest rates down. However, tariffs have rarely ended in positive outcomes, and signs are already pointing to weakening consumer and business sentiment and the risk of a slowing US economy.
“Trump continues to tout tax cuts, but there remains little detail on what this means or when they will come about. Markets will be wanting more detail on both this and further deregulation, and given the scale of these tariffs that may need to come sooner rather than later for US equities. For businesses it remains a very volatile and uncertain economic period, and this will be reflected by markets for the time being. Investors will need be patient and calm, staying invested for the long-term.”
This article is for general information and does not constitute personal financial advice. If you’re unsure what’s best for you, seek independent financial advice.
