3 Common Questions We've Received About Trump's Tariffs

The questions have started rolling in since the Trump Tariffs began this month. Concerns of inflation and trade wars are peaking, so where does that leave your portfolio?
 

How will Trump’s new tariffs impact inflation and consumer prices?

 

Which industries stand to gain or lose the most?

 

How might these tariffs affect the stock market and investor sentiment?

 

As we continue to monitor the current market, we examine these questions to provide our input and give our clients peace of mind. 

How will Trump’s new tariffs impact inflation and consumer prices?

Goldman Sachs recently revised its inflation forecast upward in response to the latest round of tariffs. Previously, the firm projected core PCE (Personal Consumption Expenditures) inflation to settle around 2.4% by Q4 2025, aligning closely with the Federal Reserve’s 2% long-term target (Hatzius, 2025). However, with the imposition of sweeping tariffs on goods from China, Canada, and the European Union—including a 60% tariff on Chinese imports and 10–25% on other key partners—Goldman now anticipates core inflation could rise to approximately 3.0% by year-end.
 
The rationale is straightforward: when the cost of imported goods rises, especially in key consumer sectors like electronics, autos, and retail merchandise, companies are more likely to pass those costs on to consumers. In addition, the tariffs increase supply chain friction, making it more expensive and time-consuming to source materials, particularly for industries dependent on global inputs. As a result, we’re likely to see inflation persist above comfortable levels even if demand cools—further complicating the Federal Reserve’s monetary policy path.
 
Hatzius, J. (2025, April 10). U.S. inflation outlook revised higher amid tariff escalation. Goldman Sachs. https://www.goldmansachs.com

Which industries stand to gain or lose the most?

The economic impact of Trump’s tariff expansion is far from uniform. Certain domestic industries—notably steel, aluminum, and some agricultural producers—are poised to benefit from reduced foreign competition. With tariffs making imported alternatives more expensive, American suppliers of raw materials and food commodities can expect a modest pricing advantage and higher domestic demand (Reuters, 2025a).


On the flip side, sectors that are deeply integrated into global supply chains are already feeling the pressure. Auto manufacturers like Ford and GM, for instance, rely on imported components from Mexico, Canada, and Europe; higher input costs are expected to compress margins and delay production. Technology companies, particularly Apple and other consumer electronics makers, have voiced concern over disruptions to Asian-based manufacturing, with Apple warning that quarterly profits may take a hit as a result of increased duties on Chinese-made parts (Reuters, 2025b). The clean energy industry is also a notable casualty, with rising steel costs threatening the economics of solar panel and wind turbine development.


This imbalance raises broader concerns about whether tariffs will ultimately protect American jobs—or instead weaken the competitiveness of U.S.-based global brands.

 

Reuters. (2025a, April 14). U.S. steel tariffs set to hike costs, lead times for clean power projects. https://www.reuters.com
Reuters. (2025b, April 14). Apple, Tesla brace for tariff fallout amid supply chain pressure. https://www.reuters.com

 

How might these tariffs affect the stock market and investor sentiment? 

Financial markets are already registering the effects of Trump’s tariff escalation, and investor sentiment has grown increasingly fragile. The S&P 500 dropped more than 4% in the week following the announcement of the new tariff package, driven largely by steep declines in the tech and retail sectors. Companies that rely on imported inputs or foreign sales are being revalued, and fund managers are rapidly rotating out of U.S. equities in favor of more defensive or international exposures.
 
According to Bank of America’s April Global Fund Manager Survey, institutional investors are reducing U.S. stock allocations at the fastest pace on record, citing trade policy uncertainty as a primary risk to earnings growth (Bank of America, 2025). Market sentiment is now highly reactive: a single headline or policy tweet has the power to swing markets by hundreds of points within hours. This represents a stark contrast from just a year ago, when volatility was relatively muted and expectations of soft-landing growth dominated investor outlooks.
 
In short, the market’s new reality is one of compressed reaction time and heightened sensitivity, particularly around trade and monetary policy developments. Investors are no longer waiting for the economic data to confirm the impact—they’re reacting to policy shifts in real time.
 
Bank of America. (2025, April 15). Global fund managers slash U.S. equity exposure at record pace. https://www.bofaml.com
The Goldman Sachs Group, Inc. is a leading global investment banking, securities, and asset and wealth management firm that provides a wide range of financial services.