{"id":13574,"date":"2024-12-04T20:32:58","date_gmt":"2024-12-04T20:32:58","guid":{"rendered":"https:\/\/zacksim.com\/blog\/?p=13574"},"modified":"2024-12-04T20:32:58","modified_gmt":"2024-12-04T20:32:58","slug":"how-will-potential-tariffs-affect-consumer-prices-and-investments","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/how-will-potential-tariffs-affect-consumer-prices-and-investments\/","title":{"rendered":"How Will Potential Tariffs Affect Consumer Prices And Investments?"},"content":{"rendered":"\n<p><em>Patricia N. from Jackson, MS asks: <\/em>Hello Mitch, I\u2019ve been seeing some advertisements recently about needing to buy goods like home appliances before the tariffs take effect, because prices are likely to go way up. Do you think this is accurate? From an investment standpoint, I also wonder if there are some winners and losers to consider from an all-out trade war? A lot to consider, I know. Thanks for your time.<\/p>\n\n\n\n<p><strong>Mitch\u2019s Response:<\/strong><\/p>\n\n\n\n<p>Thanks for writing, Patricia. It sounds like some of the retailers you follow are using the threat of higher prices to encourage consumers to pull forward purchases. While there may be a real threat of higher prices are a result of tariffs, I also think it\u2019s fair to view this as a marketing strategy to get consumers to buy more.<sup>1<\/sup><\/p>\n\n\n\n<p>Let\u2019s consider what we know so far. President-elect Trump announced recently that he would implement an additional 10% tariff on all Chinese imports and a 25% tariff on all imports from Mexico and Canada, unless their governments worked more with the U.S. to stop the flow of drugs and undocumented migrants, respectively. Mexico has vowed to retaliate, and some believe China could devalue its currency to offset the impact. Both scenarios would be economic negatives.<\/p>\n\n\n\n<p><strong><u><a href=\"https:\/\/go.steadyinvestor.com\/download-retirement-strategy-guide?source=zim&amp;medium=blog&amp;term=steadyinvestor_zim_2024_12_05&amp;content=retirement_strategy_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/download-retirement-strategy-guide?source=zim&amp;medium=blog&amp;term=steadyinvestor_zim_2024_12_05&amp;content=retirement_strategy_guide\">Can Your Retirement Strategy Weather Economic Shifts?<\/a><\/u><\/strong><\/p>\n\n\n\n<p>Recent headlines about tariffs and trade wars might have you wondering how these developments could impact your financial future. Rising costs and economic shifts can create challenges for your portfolio\u2014but with the right strategies, you can stay on course.<\/p>\n\n\n\n<p>Download our free guide, <strong><em><u><a href=\"https:\/\/go.steadyinvestor.com\/download-retirement-strategy-guide?source=zim&amp;medium=blog&amp;term=steadyinvestor_zim_2024_12_05&amp;content=retirement_strategy_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/download-retirement-strategy-guide?source=zim&amp;medium=blog&amp;term=steadyinvestor_zim_2024_12_05&amp;content=retirement_strategy_guide\">How Solid Is Your Retirement Strategy?<sup>2<\/sup><\/a><\/u><\/em><\/strong> to learn how to navigate uncertainties like these. Inside, you\u2019ll find:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The importance of flexible portfolio allocation<\/li>\n\n\n\n<li>Why keeping some liquid assets can potentially help you preserve more wealth<\/li>\n\n\n\n<li>Understanding your risk tolerance in case of a market downturn<\/li>\n\n\n\n<li>Plus, more strategies to help you protect your retirement portfolio<\/li>\n<\/ul>\n\n\n\n<p>If you have $500,000 or more to invest, download our guide to help you plan ahead!<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/go.steadyinvestor.com\/download-retirement-strategy-guide?source=zim&amp;medium=blog&amp;term=steadyinvestor_zim_2024_12_05&amp;content=retirement_strategy_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/download-retirement-strategy-guide?source=zim&amp;medium=blog&amp;term=steadyinvestor_zim_2024_12_05&amp;content=retirement_strategy_guide\"><u>Get our FREE guide: How Solid Is Your Retirement Strategy?<\/u><\/a><\/strong><sup><a href=\"https:\/\/go.steadyinvestor.com\/download-retirement-strategy-guide?source=zim&amp;medium=blog&amp;term=steadyinvestor_zim_2024_12_05&amp;content=retirement_strategy_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/download-retirement-strategy-guide?source=zim&amp;medium=blog&amp;term=steadyinvestor_zim_2024_12_05&amp;content=retirement_strategy_guide\">2<\/a><\/sup><\/p>\n\n\n\n<p>It was essentially this announcement that some retailers used to launch campaigns to encourage consumers to \u201cbuy now,\u201d anticipating that prices would inevitably go up along with tariffs. There is an element of truth to this reasoning, since we\u2019d expect companies to pass along the cost of tariffs to consumers in the form of higher prices. According to the National Retail Federation, tariffs could cost shoppers up to $78 billion in annual spending power.<\/p>\n\n\n\n<p>But this all being said, it cannot be known at this moment whether the tariffs will be enacted and\/or for how long, and how companies may respond. Tariffs were largely used as leverage for negotiations in the first term, and we may see a similar strategy in this round.<\/p>\n\n\n\n<p>From an investment standpoint, we can look to the Smoot Hawley tariffs in 1930 for clear evidence of the consequences of tit-for-tat tariffs and a global trade war. But there\u2019s also plenty of historical evidence, including from Trump\u2019s first term, where trade tensions and tariffs at the margin do not automatically trigger recessions. The magnitude of the tariffs and how vastly they\u2019re applied globally are important, including whether they arrive as a negative surprise.<\/p>\n\n\n\n<p>Many investors try to anticipate tariffs in trading strategies, such as selling the Mexican peso or automotive stocks. But again, the reality of tariffs is often quite different from the rhetoric that precedes them. Tariffs often start out very broad and then narrow substantially once exceptions are made and various parties lobby for carve-outs. Companies can also adapt\u2014moving supply chains to other unaffected countries and finding new ways to control costs. The bottom line for both consumers and investors, in my view, is to remain patient and see how things play out. History tells us that the bark is often bigger than the bite.<\/p>\n\n\n\n<p>Rather than reacting to short-term headlines, it\u2019s important to focus on strategies that can help you prepare for whatever lies ahead. Our free guide, <strong><em><u><a href=\"https:\/\/go.steadyinvestor.com\/download-retirement-strategy-guide?source=zim&amp;medium=blog&amp;term=steadyinvestor_zim_2024_12_05&amp;content=retirement_strategy_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/download-retirement-strategy-guide?source=zim&amp;medium=blog&amp;term=steadyinvestor_zim_2024_12_05&amp;content=retirement_strategy_guide\">How Solid Is Your Retirement Strategy?<sup>3<\/sup><\/a><\/u><\/em><\/strong>, provides practical insights to build a resilient retirement plan, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The importance of flexible portfolio allocation<\/li>\n\n\n\n<li>Why keeping some liquid assets can potentially help you preserve more wealth<\/li>\n\n\n\n<li>Understanding your risk tolerance in case of a market downturn<\/li>\n\n\n\n<li>Plus, more strategies to help you protect your retirement portfolio<\/li>\n<\/ul>\n\n\n\n<p>If you have $500,000 or more to invest, get our free guide, today!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The president-elect says he will implement tariffs on key trading partners, including Canda, Mexico, and China. Mitch looks at the talk and the potential reality.  <\/p>\n","protected":false},"author":3,"featured_media":13575,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[66,71],"tags":[],"class_list":["post-13574","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mitchs-mailbox","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13574","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=13574"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13574\/revisions"}],"predecessor-version":[{"id":13576,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13574\/revisions\/13576"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media\/13575"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=13574"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=13574"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=13574"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}