The White House announced a 90-day pause on reciprocal tariffs for countries that have not retaliated with higher tariffs on U.S. goods. Tariffs will continue at a 10% rate for these countries. There are a few key points to highlight:
• Notably, this excludes China which has imposed tariffs on U.S. goods, and the U.S. has escalated its tariff rate on Chinese goods to 125%.
• The initial market reaction to this news has been positive across all major indices, including some of the largest intra-day market moves since 2020.
• This is because the announcement signals the president is willing to negotiate and lower tariff rates, after a week of taking a hardline stance on tariffs. This may mean that the escalating trade war that some investors fear is less likely.
• Despite this positive market move, it’s important to remain patient and maintain a longer-term perspective since the full impact of tariffs is still unknown. This is still a challenging environment for businesses to make investment and hiring decisions, and for consumers who could potentially face higher prices.
In times like these, headlines can change quickly. In just a week, the stock market has fallen to near-bear market levels before bouncing back somewhat. As always, we are here if you want to review your personal financial plan...
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