The bottom line on tariffs

April 11, 2025

Tariffs explained—without the jargon.

From rising prices to market swings, understanding how tariffs work can help investors stay grounded amidst headline noise.

Tariffs are taxes on imported goods, often passed along to consumers in the form of higher prices—impacting everything from groceries to electronics.
They can benefit certain domestic industries, but also disrupt global supply chains, raise costs for businesses, and increase market volatility.
Investors can’t control trade policy, but they can focus on long-term goals and avoid making reactive decisions during market turbulence.

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As volatility and uncertainty have spiked in the global economy, trade tensions and tariffs have taken center stage. And investors are reacting.

So, are tariffs good or bad for the financial markets? Let’s break it down in 90 seconds.

A tariff is a tax that a government places on imported goods. Think it of it like a toll across borders. The importer pays an extra cost, or a tax, to bring a good in from another country.

Typically, that additional cost gets passed along to consumers, making foreign goods more expensive. The rationale is that tariffs encourage consumers to buy domestic products and goods.

Does that translate to a win for local businesses? Sometimes. For example, tariffs can benefit industries that compete with cheaper imports, such as U.S.-based steelmakers or agricultural producers.

But it isn’t always a win-win.

For global companies—especially in tech, automotive, and consumer goods—tariffs can increase costs, disrupt global supply chains, and shrink profit margins. And that can negatively impact stock prices.

Consider too that markets do not like uncertainty. Tariff threats or trade disputes amplify volatility—and investor fear.

Here is the bottom line: Tariffs are often political tools. They’re market movers. And they create uncertainty.

In any market cycle, we continue to encourage investors to stay diversified and avoid fear-driven changes to your portfolios. And most importantly, keep your long-term personal and financial goals in focus.

Learn more.

Our view of the impact of tariffs and market uncertainty.

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Learn more.

Our view of the impact of tariffs and market uncertainty.

Tariffs, uncertainty, and inflation.

The bottom line on market volatility and tariff talk.