2025 Tariffs and Market Reactions
A lot has happened, economically speaking, in the last week.
If you didn’t see Thursday’s news about President Trump enacting sweeping tariffs, you’ve likely seen headlines about the markets’ response to it. As of the close on Friday that response has been decisively negative. The Dow Jones Industrial Average ended down over 2,200 points (or 5.5%), while the S&P 500 dropped 5.97%, and Nasdaq is down 5.8%. 1 This comes on top of the losses already felt on Thursday.
The stories and concerns were similar across the globe.2
As we know, one of the things markets dislike most is the unknown. While the concept of tariffs wasn’t a surprise—President Trump has been promising them since his campaign—the specifics remained unclear. Lately he has been pushing reciprocal tariffs on countries who have tariffs against the U.S., but until Thursday, the details were vague. 3 It appears to be those details—including a blanket 10% tariff on all goods from most countries, 20% on the European Union, 46% on goods from Vietnam, and a total of 54% in tariffs on goods from China—that have spooked investors.4
While markets have reacted sharply to the uncertainty, the White House has framed this move quite differently. They’ve called it “Liberation Day,” describing the tariffs as part of an effort to free the U.S. from what it considers unfair trade relationships—a continued push under President Trump’s “America First” agenda.
Part of that vision includes bringing more manufacturing back to the U.S.—and in some cases, it’s already happening. Even before Thursday’s announcement, companies like Honda and Apple had announced new or expanded U.S.-based manufacturing.
That said, it will be important to watch how international corporations respond. Some experts worry that a potential recession could wipe out any gains we might see from any migration.5
None of this is likely making you feel more at ease—and that’s okay. The goal here isn’t to sugarcoat, but to explain what’s behind this market reaction.
As I mentioned, the markets hate the unknown. And despite weeks of speculation, this announcement seems to have caught many investors off guard. But more than the surprise itself, it’s the future unknowns that continue to drive the markets. Other countries are already promising to push back, either with tariffs of their own or attempts to negotiate themselves into better positions—so we may continue to see some flux ahead.6
That uncertainty may be unsettling now, but it won’t last forever.
There’s a good chance that when things settle down—even if these tariffs are not universally liked—so will the markets. While some economic pain may result from this growing trade war, any kind of known quantity is more likely to bring stability than prolonged uncertainty. And history supports that idea: something unexpected sparks short-term panic, but once the dust settles, markets tend to level out again.
And that’s the most important thing to remember: your plan is built to weather moments like this.
Maybe not the exact cause of the volatility, but the volatility itself. We built your financial plan with times like these in mind. Uncertainty is not a surprise to us—it’s an expected part of the process. That’s why we plan for it.
I don’t know about you, but I take a lot of comfort in that.
Will the tariffs spark unprecedented economic growth in the U.S.? Will they trigger a recession? It’s too early to tell. What we do know is that we’ll continue to monitor conditions closely—and make adjustments when needed. And believe me, we are watching closely.
In the meantime, we’re focused on how this situation may affect your investments in the short term. Rest assured: we’re actively looking for opportunities.
And as always, if you have questions or concerns about your investments, don’t hesitate to reach out. My team and I are here to help.
*Content Provided By Bill Good
1“Dow drops 2,200 points Friday, S&P 500 loses 10% in 2 days as Trump’s tariff route deepens” CNBC, 4 April 2025, https://www.cnbc.com/2025/04/03/stock-market-today-live-updates.html
2 “Stocks Drop Again as Trade War Intensifies,” The New York Times, 4 April 2025,https://www.nytimes.com/2025/04/04/business/stocks-trump-tariffs.html
3“Trump’s tariff ‘Liberation Day’ is a little over a week away, but the details are still a mystery,” NBC News, 24 March 2025, https://www.nbcnews.com/business/economy/trump-tariffs-april-2-liberation-day-what-to-expect-rcna197822
4 “How Trump’s trillions in new tariffs could affect America—and you,” The Washington Post, 3 April 2025, https://www.washingtonpost.com/business/2025/04/03/trump-tariffs-affect-countries-economy/
5 “First-Quarter GDP growth will be just 0.3% as tariffs stoke stagflation conditions,” CNBC, 31 March 2025,
https://www.cnbc.com/2025/03/31/first-quarter-gdp-growth-will-be-just-0point3percent-as-tariffs-stoke-stagflation-conditions-says-cnbc-survey.html
6 “Trump tariffs: List of global responses and countermeasures,” Reuters, 3 April 2025, https://www.reuters.com/markets/trump- tariffs-draw-global-promises-counter-measures-2025-04-03/
