Trump tariffs: What they mean for global markets and your financial plan
Are you concerned about how Trump’s tariffs could influence your investments? Here’s how your financial plan might be affected and why worrying isn’t the answer.
Since Donald Trump was inaugurated into the White House for the second time in January 2025, the word “tariffs” has barely left the headlines.
As you may have read, the President has vowed to impose harsh tariffs on imports from specific countries, with the most severe levies to be placed on China, Mexico, and Canada. Having mentioned this during his election campaign, Trump has since attempted to enforce these tariffs for several weeks, but some problems have arisen that have put the brakes on his plans.
While the situation is unfolding daily and there’s no crystal ball that will tell us what happens next, it is important to get to grips with what these potential tariffs could mean for global markets.
Of course, if a large portion of your wealth is invested (even if not in US markets), your financial plan could be affected by the President’s decisions now and in the future.
Let’s explore the situation regarding Trump’s tariffs as it stands, and what they could mean for you.
At the time of writing, Trump’s tariffs are on their way to being imposed, and some are already in place
At the time of writing on 21 March 2025, Trump has paused the 25% blanket tariffs he imposed on Mexican and Canadian imports, vowing that they will come back into force on 2 April.
However, as a CNN report points out, this doesn’t mean that trade will resume as normal until then. Because fewer than half of imports from Canada and Mexico comply with the USMCA treaty that Trump signed during his first term, tariffs of 25% or higher could still be applied now.
Where China is concerned, a 10% tariff has been in place since February. The BBC reports that China has retaliated with a 15% tariff on some imported energy supplies from the US, and a 10% tariff on American crude oil and some cars.
On top of this, Trump has imposed a blanket 25% tariff on all imports of steel and aluminium, which began on 12 March. In response, the EU has imposed $28 billion worth of counter-tariffs, Yahoo Finance reports, with some in force now, while others have been delayed until late April.
The fact is that trade law is extremely complicated, and these latest plans have sparked confusion around the world, even among leading experts.
But remember, it’s important to take a break from reading polarising media headlines that sensationalise the “trade war” and cause more anxiety than they’re worth. As the situation unfolds, its ramifications will become clear – until then, it may be best to stay put and resist the temptation to make any rash actions regarding your own financial plan.
Investors often react poorly to uncertainty, which means some market downswings may be inevitable
In early March, European markets held steady while the US S&P 500, among other US indices, fell. This was largely due to a fall in share prices for key players including Tesla and Nvidia. The BBC also says that Asian markets “fell sharply before recovering”, signifying potential ongoing volatility in the region.
So, it may be wise to expect the unexpected in the coming months as the President’s tariff plans continue to be rolled out.
You might have already read that indices around the world fell in recent weeks, responding to the uncertainty around US tariffs and what they might mean for businesses.
US economic growth and inflation may be unpredictable this year due to the tariffs
On 10 March, the BBC reported that many investors fear a recession after the President said in an interview that the US economy was in a “period of transition”.
He argued that “we are bringing wealth back to America,” citing that any big change is likely to have short-term ramifications.
Fewer than two weeks later, the Federal Reserve (Fed) revised its growth forecast for the year. It now expects US inflation to rise to 2.7% rather than 2.5%, and GDP growth to be around 1.7% rather than the 2.1% it forecast in December 2024, the Guardian reports.
Markets tend to bounce back from periods of volatility, so moving to cash may not be advisable
While it’s never pleasant to watch the value of your investment portfolio fall – particularly when this is due to events outside of your control – remember that historically, markets and world economies tend to bounce back.
Seeing as many investors have become spooked by recessionary fears, it might help to take a look at this graph, published by JP Morgan in 2023.
As you can see, no matter who has been in power in the US, the economy has always continued to grow over the long term.
The same goes for markets. There has always been a “good reason to sell” – be it the Covid-19 pandemic, 2008 financial crash, wars overseas, or political scandals – yet historically, markets have continued to rise and have proved hugely valuable to investors for generations.
It’s natural to worry about world events affecting your money, but at the end of the day, your long-term savings and investments are likely to ride out any short-term volatility that ensues.
Work with a Kellands financial planner to maintain a portfolio that suits your goals
Our award-winning financial planners are here to offer expert advice and reassurance in the wake of economic uncertainty. You deserve to have peace of mind where your finances are concerned, no matter what is going on in the world around you.
We can provide you and your family with a financial plan that puts your goals first and takes your concerns into account.
Email us at hale@kelland.co.uk, or call 0161 929 8838.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.