Impact of Tariffs to stock market

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Locked
Topic Author
OldSport
Posts: 1445
Joined: Tue Jul 25, 2017 7:01 pm

Impact of Tariffs to stock market

Post by OldSport »

What do we think will be the impact of the recent tariffs to both the US and International stock market? What about types of equities and bonds.

Note that this is NOT a political question or discussion. Please keep responses to the financial/investment topic based on the fiscal impact of the recently enacted tariffs on investments and inflation.
fogalog
Posts: 565
Joined: Sat Nov 07, 2015 10:31 am

Re: Impact of Tariffs to stock market

Post by fogalog »

there was a thread on this exact topic this morning which seems to have been removed. i can only guess because it was deemed political / off-topic.
KlangFool
Posts: 34948
Joined: Sat Oct 11, 2008 12:35 pm

Re: Impact of Tariffs to stock market

Post by KlangFool »

OP,

The market will be highly volatile. And, that is a good thing for someone like me with a 60/40 portfolio.

KlangFool
30% VWENX | 16% VFWAX/VTIAX | 14.5% VTSAX | 19.5% VBTLX | 10% VSIAX/VTMSX/VSMAX | 10% VSIGX| 30% Wellington 50% 3-funds 20% Mini-Larry
User avatar
LadyGeek
Site Admin
Posts: 101113
Joined: Sat Dec 20, 2008 4:34 pm
Location: Philadelphia
Contact:

Re: Impact of Tariffs to stock market

Post by LadyGeek »

This thread has run its course and locked (political / economic policy). See: Non-actionable or Trolling Topics
If readers can't do anything with the content of a topic other than argue about it, it does not belong here. Examples include:
  • US or world economic, political, tax, health care and climate policies
  • conspiracy theories of any type
  • discussions of the crimes, shortcomings or stupidity of other people, whether they be political figures, celebrities, CEOs, Fed chairmen, subprime mortgage borrowers, lottery winners, federal "bailout" recipients, poor people, rich people, etc. Of course, you are welcome to talk about the stupid financial things you have done.
We had earlier removed a thread on this topic for the reason stated here. This thread is kept visible as an example of an unacceptable topic.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
ccompounder
Posts: 57
Joined: Sun Oct 11, 2020 2:30 pm

Opportunities due to US-CAN-MEX Tarriffs

Post by ccompounder »

[Thread merged into here --admin LadyGeek]

Objective: Discuss tariffs opportunities and impacts while keeping the discussion apolitical.

25% tariffs have been announced on Canada's general export starting from 02/04/2025. 10% on oil export.
Similarly, Canada will impose 25% tariffs on $155B of US goods starting and increasing progressively over the next 3 weeks. It's predicted this will cause Canada's internal GDP to go down by 2.4%

As investors, what does this mean? What are opportunities available for stock, bonds, treasuries or even exchange rate? "Stay the course" obviously, but apart from that?
jebmke
Posts: 30443
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: Opportunities due to US-CAN-MEX Tarriffs

Post by jebmke »

Tips?

Tbh, i have no idea and doubt anyone does. I don’t make investments based on random events
Last edited by jebmke on Sun Feb 02, 2025 6:28 am, edited 1 time in total.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
User avatar
ClevrChico
Posts: 3432
Joined: Tue Apr 03, 2012 8:24 pm

Re: Opportunities due to US-CAN-MEX Tarriffs

Post by ClevrChico »

If food prices rise, discounters like WalMart will see increased business. Used items like auto parts will be more attractive, so I can see Ebay doing well.

During my last visit to Aldi, I saw someone buying over ten cartons of eggs, despite a two carton limit. People will take advantage of any price break they can get when prices are high.

The right answer is probably to just stay the course.
Last edited by ClevrChico on Sun Feb 02, 2025 6:34 am, edited 1 time in total.
exodusing
Posts: 2908
Joined: Thu Oct 13, 2022 7:32 am

Re: Opportunities due to US-CAN-MEX Tarriffs

Post by exodusing »

Markets react very quickly to news, especially widely anticipated news. It's likely markets will have reacted by Monday's open or very shortly thereafter. This suggests there are no opportunities.

Otherwise, the most likely effects are higher prices and reduced economic activity. Perhaps payments to industries that will suffer directly and from retaliatory tariffs, such as the large payments to farmers that we made the last round. Buy things before they get more expensive?
Valuethinker
Posts: 51509
Joined: Fri May 11, 2007 11:07 am

Re: Opportunities due to US-CAN-MEX Tarriffs

Post by Valuethinker »

ccompounder wrote: Sun Feb 02, 2025 6:16 am Objective: Discuss tariffs opportunities and impacts while keeping the discussion apolitical.

25% tariffs have been announced on Canada's general export starting from 02/04/2025. 10% on oil export.
Similarly, Canada will impose 25% tariffs on $155B of US goods starting and increasing progressively over the next 3 weeks. It's predicted this will cause Canada's internal GDP to go down by 2.4%

As investors, what does this mean? What are opportunities available for stock, bonds, treasuries or even exchange rate? "Stay the course" obviously, but apart from that?
It's definitely a SELL on Canadian banks and other stocks. US is by far Canada's largest export customer.

I don't see it as being of great benefit to American companies. Canada exports to the US what the US doesn't have enough of: oil 9very specifically to refineries in the Midwest USA), softwood lumber etc. Imports just about everything else.

The big exception is cars and car parts, where there is complete horizontal integration with Canada and Mexico. It's been estimated a single part can cross the borders 8 times on the way to becoming a finished car.

So a SELL on the Big 3 automakers who do the majority of their manufacturing in North America. Japanese transplants should be in better shape - they can import from Japan instead.

I would perhaps issue a BUY on US TIPS bonds, because all of this disruption will raise inflation in US economy. Although the US runs a trade surplus with Canada (outside of oil & oil products) I don't think difficulties in Canada will affect many US companies particularly strongly. Market is too small.

It's conceivable there will be some drug shortages in America. Canada (and Denmark) are major manufacturing centres for certain types of drugs. Hit on drugstore stocks like CVS & Pharmaceutical Benefit Managers?

Of course, the markets should have already priced all of this in.

TIPS bonds might be the thing where the effect is not yet fully felt, because it's still imponderable.

Exchange Rate markets react *fast*. For example in the Brexit vote, which was a surprise Yes, the GBP dropped against the Euro by about 16%, but did so between about 1am and 4am. For this event, which has had some warning, I would expect CAD would already have traded down. However if you believe this is not a short-term thing, then likely it will trade down even further in the near future -- you have to take a view, rather than go with the market consensus though.
User avatar
LadyGeek
Site Admin
Posts: 101113
Joined: Sat Dec 20, 2008 4:34 pm
Location: Philadelphia
Contact:

Re: Impact of Tariffs to stock market

Post by LadyGeek »

I merged ccompounder's thread into the ongoing discussion.

This thread remains locked.

At this time, there are far too many ongoing political issues (US and other countries) - not to mention forthcoming court challenges. Let's wait a while until the dust settles. We'll reconsider unlocking the thread at that time.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
User avatar
id0ntkn0wjack
Posts: 484
Joined: Wed Nov 30, 2022 3:12 pm

Getting Defensive Due to Tariffs?

Post by id0ntkn0wjack »

[Merged into existing discussion, the topic remains locked at this time. - moderator oldcomputerguy]

With US Tariffs on key trading partners now in place, I am hopeful that we can have a non-political discussion on defensive strategies that might be wise to pursue.

https://bogleheads.org/forum/rules

What I think I know: Tariffs are likely to be inflationary

Why I am concerned: the post-Covid supply shock related inflation affected my bond holdings in a manner that I had not expected (steep drop in value) that still has not completely recovered.

Why this time might be different:
- This is a man-made effect rather than an Act of God and can be rescinded quickly
- Perhaps the Market has already accounted for the action
- Federal Reserve tea leaves seem to indicate that it is ready to respond more quickly (or ease more slowly) should inflation heat back up.

The Wiki offers a nice discussion of inflation planning for retirement (https://www.bogleheads.org/wiki/Inflati ... t_spending), but I'm curious of what approaches the hive mind might be considering during the accumulation phase?
rebellovw
Posts: 1794
Joined: Tue Aug 16, 2016 4:30 pm

Re: Getting Defensive Due to Tariffs?

Post by rebellovw »

I think this will be just a little blip in the grand scheme of things. I was thinking - perhaps start buying TIPS again- but seems knee jerk to change anything.

I think I'll just do what I'm doing. All new money buying TSM and BND as planned.

But I was thinking of getting defensive after reading news articles and that is why I came here.

Thanks for the thread.
Geologist
Posts: 3763
Joined: Fri Jan 02, 2009 6:35 pm

Re: Getting Defensive Due to Tariffs?

Post by Geologist »

I assume this thread will be locked because there are earlier threads that on this topic already locked (viewtopic.php?p=8235654#p8235654)
jebmke
Posts: 30443
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: Getting Defensive Due to Tariffs?

Post by jebmke »

Geologist wrote: Sun Feb 02, 2025 10:06 am I assume this thread will be locked because there are earlier threads that on this topic already locked (viewtopic.php?p=8235654#p8235654)
Yes; I think the mods have a special "lock and merge" button. :P
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
GoldStar
Posts: 1281
Joined: Wed May 23, 2018 10:59 am

Re: Getting Defensive Due to Tariffs?

Post by GoldStar »

id0ntkn0wjack wrote: Sun Feb 02, 2025 9:53 am With US Tariffs on key trading partners now in place, I am hopeful that we can have a non-political discussion ...
You are the fifth or so person to try. Do a search before trying a new topic. They removed some but left one locked as an example.
User avatar
Feldman
Posts: 409
Joined: Sun May 19, 2024 12:46 pm
Location: . . . From Across The Hall!

Re: Getting Defensive Due to Tariffs?

Post by Feldman »

I guess I'm just going to keep on doing what I'm doing and hope for the best, controlling what I can control -- which is namely spending, savings rate, and asset allocation.
Jack FFR1846
Posts: 19718
Joined: Tue Dec 31, 2013 6:05 am
Location: 26 miles, 385 yards west of Copley Square

Re: Getting Defensive Due to Tariffs?

Post by Jack FFR1846 »

I think the other thread on tariff affects got shut down for reasons I don't know. Tuesday, tariffs take hold. Here's a great listing (on video) of car models built in Canada and Mexico that are affected. How will car companies handle the tariffs? I don't know. Plenty of ways they can handle it but I'm sure each company will find their own way.

If you were planning to buy a Grand Wagoneer EV or the new Dodge Daytona EV (built in Canada), the combination of these things bricking at dealers, less than 90 orders nation wide and the tariff affecting them, they are now dead.

TFL with the list: https://www.youtube.com/watch?v=iJKwNKGKtKw
Bogle: Smart Beta is stupid
User avatar
rob
Posts: 5599
Joined: Mon Feb 19, 2007 5:49 pm
Location: Here

Re: Getting Defensive Due to Tariffs?

Post by rob »

Rule used to be wait until it's actually law... now it is... seems to be wait for something else to allow comment.

I expect it to be inflationary.
| Rob | Its a dangerous business going out your front door. - J.R.R.Tolkien
stan1
Posts: 16198
Joined: Mon Oct 08, 2007 4:35 pm

Re: Getting Defensive Due to Tariffs?

Post by stan1 »

There still seems to be an unquestionable assumption that the next 80 years will be just like the last 80 years. For everyone's benefit, I sure hope that assumption remains true.
Last edited by stan1 on Sun Feb 02, 2025 10:13 am, edited 1 time in total.
rebellovw
Posts: 1794
Joined: Tue Aug 16, 2016 4:30 pm

Re: Getting Defensive Due to Tariffs?

Post by rebellovw »

Feldman wrote: Sun Feb 02, 2025 10:09 am I guess I'm just going to keep on doing what I'm doing and hope for the best, controlling what I can control -- which is namely spending, savings rate, and asset allocation.
Me too!
Dantes
Posts: 449
Joined: Wed Feb 25, 2015 5:38 pm

Re: Getting Defensive Due to Tariffs?

Post by Dantes »

Well, tariffs do now exist, and concern about their effects is reasonable. Walmart, for example, imports something like 70% of their product from China. That doesn't seem like it would be good for Walmart - but we will all know more on Monday when the markets open.
User avatar
CyclingDuo
Posts: 6471
Joined: Fri Jan 06, 2017 8:07 am

Re: Getting Defensive Due to Tariffs?

Post by CyclingDuo »

id0ntkn0wjack wrote: Sun Feb 02, 2025 9:53 am With US Tariffs on key trading partners now in place, I am hopeful that we can have a non-political discussion on defensive strategies that might be wise to pursue.

https://bogleheads.org/forum/rules

What I think I know: Tariffs are likely to be inflationary

Why I am concerned: the post-Covid supply shock related inflation affected my bond holdings in a manner that I had not expected (steep drop in value) that still has not completely recovered.

Why this time might be different:
- This is a man-made effect rather than an Act of God and can be rescinded quickly
- Perhaps the Market has already accounted for the action
- Federal Reserve tea leaves seem to indicate that it is ready to respond more quickly (or ease more slowly) should inflation heat back up.

The Wiki offers a nice discussion of inflation planning for retirement (https://www.bogleheads.org/wiki/Inflati ... t_spending), but I'm curious of what approaches the hive mind might be considering during the accumulation phase?
What percentage of your fixed income is currently invested in TIPS?
"Save like a pessimist, invest like an optimist." - Morgan Housel | "Pick a bushel, save a peck!" - Grandpa
User avatar
nedsaid
Posts: 20164
Joined: Fri Nov 23, 2012 11:33 am

Re: Getting Defensive Due to Tariffs?

Post by nedsaid »

Dantes wrote: Sun Feb 02, 2025 10:21 am Well, tariffs do now exist, and concern about their effects is reasonable. Walmart, for example, imports something like 70% of their product from China. That doesn't seem like it would be good for Walmart - but we will all know more on Monday when the markets open.
Hint: The markets already reacted on Friday when the new tariffs were announced. Also keep in mind what you are seeing is a negotiating tactic, nothing says that these will stick.
A fool and his money are good for business.
User avatar
KEotSK66
Posts: 840
Joined: Wed Mar 11, 2020 7:03 pm

Re: Getting Defensive Due to Tariffs?

Post by KEotSK66 »

I shifted a bit to the offensive, 4-5% into growth and energy stocks, on top of what some would consider a conservative or moderate portfolio.
"I just got fluctuated out of $1,500.", Jerry🗽
User avatar
Watty
Posts: 30619
Joined: Wed Oct 10, 2007 3:55 pm

Re: Getting Defensive Due to Tariffs?

Post by Watty »

stan1 wrote: Sun Feb 02, 2025 10:11 am There still seems to be an unquestionable assumption that the next 80 years will be just like the last 80 years. For everyone's benefit, I sure hope that assumption remains true.
The last 80 years includes the double digit inflation years of the late 1970s and early 1980s.

It is a little bit out of your 80 year window but anyone interested in what the effects of tariffs might be should be familiar with the 1930 Smoot Hawley Tariff Act which is generally agreed to have made the Great Depression a lot worst.

https://en.wikipedia.org/wiki/Smoot%E2% ... Tariff_Act
User avatar
iceport
Posts: 6338
Joined: Sat Apr 07, 2007 4:29 pm

Re: Getting Defensive Due to Tariffs?

Post by iceport »

rob wrote: Sun Feb 02, 2025 10:11 am I expect it to be inflationary.
Well, at least we can slash taxes with all the tariff money coming in from the foreign countries, right? Good thing there's a Wharton grad in charge who knows exactly how tariffs work!

:wink:
"Discipline matters more than allocation.” |—| "In finance, if you’re certain of anything, you’re out of your mind." ─William Bernstein
bikechuck
Posts: 1659
Joined: Sun Aug 16, 2015 9:22 pm

Re: Getting Defensive Due to Tariffs?

Post by bikechuck »

nedsaid wrote: Sun Feb 02, 2025 10:25 am
Dantes wrote: Sun Feb 02, 2025 10:21 am Well, tariffs do now exist, and concern about their effects is reasonable. Walmart, for example, imports something like 70% of their product from China. That doesn't seem like it would be good for Walmart - but we will all know more on Monday when the markets open.
Hint: The markets already reacted on Friday when the new tariffs were announced. Also keep in mind what you are seeing is a negotiating tactic, nothing says that these will stick.
How do you know that it is just "a negotiating tactic" and not an attempt at structural change with tariffs replacing the income tax as our incumbent president has stated is his goal and potential end game?

I think we live in dangerous times and that a trade war could be inflationary so I am grateful that I established a TIPS ladder that takes me to age 88 in January of 2024.
User avatar
LadyGeek
Site Admin
Posts: 101113
Joined: Sat Dec 20, 2008 4:34 pm
Location: Philadelphia
Contact:

Re: Impact of Tariffs to stock market

Post by LadyGeek »

As noted earlier, this thread remains locked.

At this time, there are far too many ongoing political issues (US and other countries) - not to mention forthcoming court challenges. Let's wait a while until the dust settles. We'll reconsider unlocking the thread at that time.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
LLeaff
Posts: 69
Joined: Wed May 15, 2019 10:37 am

Tariff Discussion - Why are they banned here?

Post by LLeaff »

Why are the mods locking discussions about the new US tariffs?

[This thread moved to this (locked) thread. See above guidance. Moderator Pops1860]
GreenGreenWater
Posts: 18
Joined: Wed Apr 07, 2021 3:11 pm

Re: Tariff Discussion - Why are they banned here?

Post by GreenGreenWater »

I think it could get too ugly too quick.
exodusing
Posts: 2908
Joined: Thu Oct 13, 2022 7:32 am

Re: Tariff Discussion - Why are they banned here?

Post by exodusing »

Are we allowed to even mention tariffs? For example, the market is down because it did not expect tariffs to be put in place or that they'd start this high.
jebmke
Posts: 30443
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: Tariff Discussion - Why are they banned here?

Post by jebmke »

Image
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
LLeaff
Posts: 69
Joined: Wed May 15, 2019 10:37 am

Re: Tariff Discussion - Why are they banned here?

Post by LLeaff »

GreenGreenWater wrote: Mon Feb 03, 2025 9:10 am I think it could get too ugly too quick.
Can't the individual offending messages be removed rather than banning the entire topic? Is it a question of not enough moderator bandwidth?

I'm flabbergasted that this economic issue cannot be discussed on this site
jebmke
Posts: 30443
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: Tariff Discussion - Why are they banned here?

Post by jebmke »

LLeaff wrote: Mon Feb 03, 2025 9:22 am
GreenGreenWater wrote: Mon Feb 03, 2025 9:10 am I think it could get too ugly too quick.
Can't the individual offending messages be removed rather than banning the entire topic? Is it a question of not enough moderator bandwidth?

I'm flabbergasted that this economic issue cannot be discussed on this site
Mods are volunteers. At this point, I am not interested in foisting more work on them. They do a marvelous job already.

General discussion of public policy is generally not allowed so this isn't really new. Nor is public complaint about moderator activity, btw. They have requested that "complaints" be submitted via PM.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
Valuethinker
Posts: 51509
Joined: Fri May 11, 2007 11:07 am

Re: Tariff Discussion - Why are they banned here?

Post by Valuethinker »

jebmke wrote: Mon Feb 03, 2025 9:24 am
LLeaff wrote: Mon Feb 03, 2025 9:22 am

Can't the individual offending messages be removed rather than banning the entire topic? Is it a question of not enough moderator bandwidth?

I'm flabbergasted that this economic issue cannot be discussed on this site
Mods are volunteers. At this point, I am not interested in foisting more work on them. They do a marvelous job already.

General discussion of public policy is generally not allowed so this isn't really new. Nor is public complaint about moderator activity, btw. They have requested that "complaints" be submitted via PM.
Here! Here!
User avatar
quantAndHold
Posts: 10768
Joined: Thu Sep 17, 2015 10:39 pm
Location: West Coast

Re: Tariff Discussion - Why are they banned here?

Post by quantAndHold »

Any discussion will quickly and repeatedly turn to politics, and the mods are volunteers who need to do other things besides babysit one particular topic.
Geologist
Posts: 3763
Joined: Fri Jan 02, 2009 6:35 pm

Re: Tariff Discussion - Why are they banned here?

Post by Geologist »

From Section 4b of the Forum Policies (Unacceptable Topics):

"If readers can't do anything with the content of a topic other than argue about it, it does not belong here. Examples include:

US or world economic, political, tax..."

Tariffs are certainly economic and tax policies, so even if people avoid political statements, then the discussion will have to deal with economic or tax policies.
exodusing
Posts: 2908
Joined: Thu Oct 13, 2022 7:32 am

Re: Tariff Discussion - Why are they banned here?

Post by exodusing »

jebmke wrote: Mon Feb 03, 2025 9:24 am
LLeaff wrote: Mon Feb 03, 2025 9:22 am

Can't the individual offending messages be removed rather than banning the entire topic? Is it a question of not enough moderator bandwidth?

I'm flabbergasted that this economic issue cannot be discussed on this site
Mods are volunteers. At this point, I am not interested in foisting more work on them. They do a marvelous job already.

General discussion of public policy is generally not allowed so this isn't really new. Nor is public complaint about moderator activity, btw. They have requested that "complaints" be submitted via PM.
I'd draw a distinction between "[policy] is the reason for the market movement" and "[policy] is good/bad". There are numerous discussions of the impact of actual and predicted Fed actions. OTOH, claims about the effects of government borrowing are sometimes allowed and sometimes not, often for reasons I can't discern. Does anyone seriously doubt why the market is down so far today? We seem able to discuss DeepSeek, even if there are posts that [Country] is evil.

I'd just like some more clarity, including if the T word is banned per se, for whatever reason.
Pops1860
Moderator
Posts: 2525
Joined: Thu Mar 14, 2013 4:05 pm

Re: Impact of Tariffs to stock market

Post by Pops1860 »

As noted earlier, this thread remains locked.

At this time, there are far too many ongoing political issues (US and other countries) - not to mention forthcoming court challenges. Let's wait a while until the dust settles. We'll reconsider unlocking the thread at that time.


To make this point: The status of the tariff(s) has been changed again just this morning https://www.nbcnews.com/politics/econom ... rcna190433. The situation is very fluid.

Moderator Pops1860
The power of accurate observation is often called cynicism by those who do not have it. ~George Bernard Shaw
Locked