Michael A. from Frederick, MD asks: Hello Mitch, I’ve been growing increasingly concerned/wary about how investors seem to be totally shrugging off any new tariff announcement. The tariffs keep on coming, but the market does not seem to care at all. Are you getting this sense as well? Your thoughts are appreciated, thanks.
Mitch’s Response:
I take your point and think you’re largely correct. Markets have been mostly unbothered by recent tariff headlines, with the latest example arriving last week in the form of a 100% tariff on semiconductor imports. Despite this very punitive tariff on a critical industry, chip stocks and the broader market showed little reaction.
I think there are a few reasons for the muted market move. First, what we have so far is an announcement with few policy details. The market has seen this movie before, so to speak. In the weeks and months that follow, we’ll learn how chips embedded in finished products like cars or smartphones would be treated, and which companies land exemptions based on ‘deals’ like an agreement to invest in U.S. manufacturing. In past trade actions, high-profile exemptions have often followed high headline rates, softening the ultimate impact.1
Tariff News, Market Calms. What Does This Mean for Your Portfolio?
Recent tariff announcements haven’t shaken the market as much as you might expect. But that doesn’t mean it’s time to sit back. Policy shifts like these can set off quieter changes beneath the surface, and for investors who know where to look, that can open the door to opportunity.
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While these factors may help explain the market calm, I think you’re right not to treat the tariffs as though they’re harmless. Even a smaller-than-feared final policy could disrupt certain supply chains, raise costs for some companies, or lead to incremental price increases for end products. And in the case of advanced semiconductors, where switching suppliers can take years, the ripple effects of new trade rules can be long-lived. In a sense, the effect resembles what we’d expect from too much regulation, where costs are higher than they could be.
Even still, the current lack of market reaction likely reflects expectations that the final policy will be more limited than the initial announcement. That doesn’t mean there’s no risk, only that investors may be discounting the most extreme scenarios.
From my perspective, this is a development worth watching closely. Tariff policy can shift quickly, and exemptions or details that look likely today can change in negotiation. If the final rules come in broader than expected, I would expect to see a sharp pullback, much like we saw in early April.
That said, the pattern we’ve seen throughout this tariff cycle is that enacted rates have generally come in lower than the headline figures first announced. In many cases, once the full fact sheets are released, exemptions for key products, suppliers, or trade partners have reduced the scope considerably. This has been true in other industries—Canadian metals under the US-Mexico-Canada Agreement, copper in recent trade measures, and now appears to be playing out in semiconductors.
When that happens, markets often respond positively. A tariff that lands at, say, 15% instead of 100% isn’t necessarily good news for the targeted sector, but it’s better than feared. That shift from worst-case to more moderate reality can lift sentiment, even if some companies still face higher costs.
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- Potential bargains that may be uncovered through turbulence
- Why volatility may help prevent overheating and market “bubbles”
- What history shows us about opportunities for steady investors in turbulent markets
- Plus, more ways you may be able to benefit from a volatile market
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Disclosure
1 MSN. 2025. https://www.msn.com/en-us/money/economy/investors-unfazed-by-trump-s-100-semiconductor-tariff-threat/ar-AA1K5KRJ
2 ZIM may amend or rescind the free guide offer, Using Market Volatility to Your Advantage, for any reason and at ZIM’s discretion.
3 ZIM may amend or rescind the free guide offer, Using Market Volatility to Your Advantage, for any reason and at ZIM’s discretion
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