Tariff Tantrums Continue

Market Commentary – March 10, 2025

President Trump continues to announce tariffs, some of them rather stiff, against nations he accuses of blocking American exports with tariffs and non-tariff trade barriers; he is also waging this trade war to fight against drugs coming into the U.S. We continue to believe this is a strategy to pry open foreign markets to American goods; however, there is some evidence the Trump Administration intends to use tariffs as a way to raise revenue for the federal government, which means that some tariffs would be permanent. Initial tariffs are against the U.S.’s three largest trading partners: Canada, Mexico, and China. Our understanding is that Trump intends to impose tariffs before negotiating as a means of impressing upon the global trading system that the U.S. is serious about its intentions. This has led to considerable uncertainty in business planning for companies with global customers and supply chains – and has created significant fear among investors, worried about the overall impact on the economy and the markets. The Federal Reserve’s Beige Book, released last week, also had many comments relating to uncertainty. DOGE (Department of Government Efficiency) is also adding to these worries. There is no way to “dodge DOGE,” so we anticipate continued uncertainty leading to continued volatility in all markets.