Some uncertainty is a normal part of life, both personally and professionally. The extreme uncertainty caused by President Trump’s daily tariff decisions makes decision-making difficult, leading to inaction. The Trump administration’s tariff motives are multifaceted but have the same goal, to tip the scales in the United States favor. They aim to reduce our trade and budget deficits by raising taxes on imports while reducing taxes on incomes. Additionally, the tariffs are intended to create negotiating leverage on other priorities, such as border security, to curb illegal immigration and fentanyl trafficking. The application and implementation of US tariffs, whether promised or imposed on China, Canada, Mexico, Europe, and other nations, could have significant economic impacts across various sectors in the U.S., affecting labor costs, inflation, corporate earnings, equity performance, and GDP.

Higher labor and material costs could sharply curtail automobile companies’ profits. U.S. steel and aluminum producers might benefit from tariffs. However, they would likely pass on increased production costs to buyers, including automobile and other industrial companies, and eventually to consumers. This would fuel inflation. Companies like Apple and Home Depot could face higher supply chain costs. Additionally, tariffs on Canadian energy imports could reduce Canadian producers’ margins, increase costs for U.S. refiners, and ultimately harm U.S. consumers. Retailers will likely absorb some of the cost of tariffs on imported goods and even small price increases will reduce some demand.