Riding the Tariff Rollercoaster

Some company executives aren’t waiting around to find out the ultimate outcome of this global game of chicken. Many have stopped offering up 2025 earnings forecasts, put expansion plans on hold, and launched cost-cutting efforts. They’re not alone. US consumers reading the headlines and watching their 401K balances vacillate may be less inclined to splurge on vacations or go out for pricey dinners. 

If enough CEOs and consumers get cold feet and stop spending, the US economy could fall into a recession, turning their fears into a self-fulfilling prophecy. Here’s a quick look at how some CEOs and consumers are pulling in their horns.      

Consumers’ Wings Get Clipped   

It’s early days, but executives at American Airlines, Southwest Airlines and Alaska Air Group have reported softer demand from US consumers looking to travel. The three airlines pulled the earnings guidance they normally provide to Wall Street’s analysts due to the uncertain environment. 

Not just the airlines are facing headwinds. Norwegian Cruise Line Holdings called out the softening reservation trends it’s seeing. The company plans to cut costs in order to achieve its previously stated full-year earnings target. Booking Holdings, parent of Priceline, OpenTable and other travel-oriented websites, noted that Canadian and European travelers have reduced their travel to the US and are opting to visit other countries instead. 

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Layoffs Hit Trucking  

President Trump paused reciprocal tariffs on most countries for 90 days ending July 9. The pause did not apply to China, however, where tariffs on some products have soared north of 100%. Export orders have plunged to levels last seen in 2022, when they were hurt by the pandemic and Chinese manufacturing activity contracted in April. 

Fewer ships heading from China to the US will mean fewer goods that need to be unloaded and shipped around our country. All manner of transportation companies stand to see their business decline. In early April, Volvo Group North America, which manufactures trucks, announced plans to lay off 550-800 employees at its Mack Trucks sight in Macungie, Pennsylvania, and two Volvo Group facilities in Dublin, Virginia and Hagerstown, Maryland. 

“Heavy-duty truck orders continue to be negatively affected by market uncertainty about freight rates and demand, possible regulatory changes, and the impact of tariffs,” a company spokesperson for Volvo Group North America told Reuters April 18 article. The company employs almost 20,000 people in North America. 

What to Watch   

At WHZ we’ll be watching how tariffs—both threatened and actual—affect consumers, companies and the economy. We understand how disconcerting the headlines and market volatility can be, which is why we always advise that portfolios are diversified, and not over indexed to any one country or industry. You may also want to consider including allocations to fixed income investments, which should provide a steadying influence if a downturn does arrive. 

It’s during times like these that having a comprehensive financial plan that includes thoughtful retirement planning – and a strategic financial partner to guide you – is of the utmost importance. If you’d like to see how we can help you, schedule a complimentary discovery session on our website at whzwealth.com, or by calling us at (860) 928-2341.  

Authored by Principal/Managing Partner Laurence Hale AAMS, CRPS®. Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Advisor. 697 Pomfret Street, Pomfret Center, CT 06259 and 392-A Merrow Road, Tolland, CT 06084. 860-928-2341. 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. 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 financial advisor.