Market commentary
The bottom line on tariffs
What tariffs really mean for prices, profits, and portfolios—and how to talk about them with clients.
The bottom line on tariffs
Tariffs explained—without the jargon.
From rising prices to market swings, understanding how tariffs work can help investors stay grounded amidst headline noise.
- Tariffs are taxes on imported goods, often passed along to consumers in the form of higher prices—impacting everything from groceries to electronics.
- They can benefit certain domestic industries, but also disrupt global supply chains, raise costs for businesses, and increase market volatility.
- Investors can’t control trade policy, but they can focus on long-term goals and avoid making reactive decisions during market turbulence.
As volatility and uncertainty have spiked in the global economy, trade tensions and tariffs have taken center stage. And investors are reacting.
So, are tariffs good or bad for the financial markets? Let’s break it down in 90 seconds.
A tariff is a tax that a government places on imported goods. Think it of it like a toll across borders. The importer pays an extra cost, or a tax, to bring a good in from another country.
Typically, that additional cost gets passed along to consumers, making foreign goods more expensive. The rationale is that tariffs encourage consumers to buy domestic products and goods.
Does that translate to a win for local businesses? Sometimes. For example, tariffs can benefit industries that compete with cheaper imports, such as U.S.-based steelmakers or agricultural producers.
But it isn’t always a win-win.
For global companies—especially in tech, automotive, and consumer goods—tariffs can increase costs, disrupt global supply chains, and shrink profit margins. And that can negatively impact stock prices.
Consider too that markets do not like uncertainty. Tariff threats or trade disputes amplify volatility—and investor fear.
Here is the bottom line: Tariffs are often political tools. They’re market movers. And they create uncertainty.
In any market cycle, we continue to encourage investors to stay diversified and avoid fear-driven changes to your portfolios. And most importantly, keep your long-term personal and financial goals in focus.
Learn more.
Our view of the impact of tariffs and market uncertainty.
Important information
This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Positioning and holdings are subject to change. All information as of the date indicated. Diversification may not protect against market risk. This information should not be relied upon by the reader as research or investment advice, (unless you have otherwise separately entered into a written agreement with SEI for the provision of investment advice) nor should it be construed as a recommendation to purchase or sell a security. The reader should consult with their financial professional for more information.