Will The New Tariffs Impact Your Investment Strategy?

There’s been a lot of talk lately about new US tariff changes, especially after the announcements on 3 April.

If you’re worried about how these changes might affect your investments, you’re not alone, but it’s important not to panic! Let’s take an informed look at the new changes.

What happened?

The US government has announced a set of new import tariffs, including:

• A 10% tariff on all imports into the US (starting 5 April 2025).
• Country-specific tariffs as high as 34%, specifically for China, EU, Japan, and India.
• A 25% tariff on all foreign-made vehicles.

These tariffs are in addition to existing levies on steel, aluminium, and car parts. It is estimated that the tariff rate could increase from 2.3% in 2024 to over 22%.

What does this mean for markets?

Here’s a snapshot of how different sectors could be affected:

Equities

• Global equity markets may see short-term volatility, especially in sectors such as industrials and technology.
• US companies that trade globally may face higher input costs and reactive tariffs.
• Domestic producers in the US may benefit if manufacturing shifts closer to America.

Fixed Income

• As tariffs generally increase input costs, inflation levels could rise.
• Central banks may respond cautiously, which could affect interest rates.

Commodities & Currencies

• A potential slowdown in global growth could weaken demand for items like oil and metals.
• The US dollar may strengthen intially, but long-term imbalances could reverse that trend.

Geopolitical Risk

The risk of reactive tariffs from traders like China and the EU remains high, increasing the risk of conflict between countries.

How might this impact your investment portfolio?

Although the current market is volatile, the environment will continue to change. Here’s what you should keep in mind:

• Markets don’t like uncertainty, and these new tariff changes may only cause a short-term reaction.
• Long-term investors should avoid knee-jerk decisions at this time.
• These changes are unlikely to derail your well-diversified portfolio if long-term investing has been considered.

What to do now:

At this stage, we don’t recommend making any changes to your portfolios. If you’re feeling unsure about how the new changes may affect you, please speak with your Aintree Group adviser.

At Aintree Group Wealth, we offer Financial Health Checks and can conduct a review of your portfolio to make sure it still suits your goals and needs.

Although this is a significant global development, there is no reason to panic. The best option is to keep your investment portfolio diversified and focused on the long-term benefits.

If you’d like to talk through how global events like this might impact your investments, we’re here to help!

This is general advice only and has not been prepared with your situation and needs in mind. For individual and personalised advice, we highly recommend that you seek out proper professional advice from your financial adviser.