Financial Impacts of Trump’s First 60 Days in Office

Proponents hope tariffs will spur companies to shift overseas manufacturing to the US and prod other countries to lower their barriers to and tariffs on US goods. Naysayers fear tariffs will spark inflation, global trade wars, and slow the US economy.  

President Trump has also moved swiftly to cut federal jobs and waste and sharply reduce illegal immigration. Next up: President Trump plans to extend expiring tax cuts and implement new cuts.  

Here's a look at some of the financial policies coming out of Washington DC and the volatility it has created.  

Tariffs, Tariffs and More Tariffs  

Many investment pros expected President Trump to use tariffs as a negotiating tool, but his tariff announcements have been farther reaching than expected and sparked global backlash.   

Consider the global tit-for-tat surrounding steel tariffs. President Trump announced 25% tariffs on steel and aluminum imports as of March 12. When the European Union responded with tariffs on $28 billion of US goods starting in April, Trump countered by threatening 200% tariffs on wines, champagnes and alcoholic products.  

Likewise, after Trump announced an additional 10% tariff on Chinese imports, on top of the 10% tariff he placed on Chines imports during his first term, China responded by placing 15% duties on US farm goods.  

Sharp, unexpected changes in tariff policy have added to investors’ uncertainty. Trump’s 25% tariff on all imported goods from Canada and Mexico went into effect on March 4, but just two days later they were paused until April 2, while the parties negotiate. No doubt up for discussion will be Canada’s response to Trump’s steel and aluminum tariffs: Duties on $20 billion of US goods. 

As of the time of this writing, the next date to watch is April 2, when Trump’s reciprocal tariffs on all goods entering the US begin. The United States plans to negotiate trade agreements individually with other countries, considering the barriers and tariffs each country imposes on US products. We’ll be watching to see if tariffs result in higher prices that could hurt consumer spending. 

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Up Next: Tax Policy 

President Trump will push to extend the expiring elements of the Tax Cuts and Jobs Act of 2017 (TCJA), signature legislation from his first term. If the legislation expires, individuals’ tax rates would jump, the child tax credit would shrink, and the estate tax exemption level could be cut in half.  

President Trump would also like to increase the state and local tax (SALT) deduction, which was lowered under the TCJA, and he aims to waive taxes on tips, overtime, and Social Security payments. If he’s successful, this could put extra dollars in consumers’ wallets and boost consumer spending. 

Stocks: Looking Beyond Technology 

The rapid changes coming out of Washington DC have increased the stock market’s volatility, led to sharp declines in technology stocks, and left the stock market indexes in negative territory. But that doesn’t mean all stocks are falling.  

The S&P 500 Health Care stock price index has risen 6.4% so far this year (through March 20) and the S&P 500 Energy stock price index has climbed 8.0%. International stocks are having a banner year and value stocks are outperforming as well.

Take A Strategic, Balanced Approach 

Headlines and rapid change can sometimes be scary. But that’s why it’s important to both be proactive and take a long-term perspective. Here at WHZ our experienced, seasoned financial advisors ensure that clients have balanced portfolios to weather the most volatile markets. We’ll be sure to keep up with all of the Trump administration’s policies and position our clients’ portfolios and financial plans accordingly, with consistent communication all along the way.  

If you don’t have an unwavering financial partner doing that for you and your own investments and financial plan right now, it’s a good time to get one. You can schedule a complimentary discovery session to see how we can serve you and your particular needs and goals on our website, whzwealth.com, or by calling us at (860) 928-2341.   

Authored by Principal/Managing Partner Laurence Hale AAMS, CRPS®. All indices are unmanaged, and investors cannot actually invest directly into an index. Unlike investments, indices do not incur management fees, charges, or expenses. Past performance does not guarantee future results. This material is intended for informational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. Past performance does not guarantee future results. Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Advisor. These materials are general in nature and do not address your specific situation. For your specific investment needs, please discuss your individual circumstances with your representative. WHZ Strategic Wealth Advisors does not provide tax or legal advice, and nothing in the accompanying pages should be construed as specific tax or legal advice. 697 Pomfret Street, Pomfret Center, CT 06259 and 392-A Merrow Road, Tolland, CT 06084. 860-928-2341. www.whzwealth.com.