Two Don’ts and Four Dos During Trump’s Trade War

 


Two Don’ts and Four Dos During Trump’s Trade War

The financial rules have changed now that tariffs have disrupted the markets and created economic uncertainty. What can you do? (And what shouldn't you do?)

By Steven Orlowski, CFP, CNPR

The Trump administration’s trade war — marked by sweeping tariffs on goods from China, Europe, and other key trading partners — has created a ripple of uncertainty across the global economy. For investors, business owners, and everyday consumers, the normal financial playbook has been thrown out the window.

In volatile times like these, knowing how to adjust your financial strategy is critical. Here are two key things NOT to do, followed by four smart financial moves you should consider during this turbulent period.

The Two Don'ts

1. Don’t Panic-Sell Your Investments

Market volatility is unsettling, especially when driven by unpredictable trade policy. But reacting emotionally — like panic-selling during a market dip — is one of the worst moves an investor can make. Timing the market rarely works, and knee-jerk decisions can lock in losses you might otherwise recover from.

Instead: Stay the course. Revisit your risk tolerance and investment timeline. If your portfolio is properly diversified, it’s designed to weather these storms.

2. Don’t Overextend Your Business on Imported Inventory

If your business relies on imported goods, be cautious. Buying excess inventory now in anticipation of future tariffs might seem wise, but overleveraging your business or depleting cash reserves can backfire — especially if tariffs are lifted or demand shifts unexpectedly.

Instead: Work with your suppliers to create flexible purchase plans. Consider sourcing alternatives domestically or from countries not impacted by tariffs.

The Four Dos

1. Do Reevaluate Your Supply Chain

Whether you’re a manufacturer, retailer, or wholesaler, this is the time to scrutinize your suppliers. Diversifying your supply chain can reduce vulnerability to tariff-related disruptions.

Pro Tip: Start building relationships with suppliers in countries unaffected by U.S. tariffs — such as Vietnam, Mexico, or other Latin American nations.

2. Do Reassess Your Investment Allocation

Now’s the time for a portfolio check-up. While U.S. equities may be reacting sharply to trade headlines, certain sectors like utilities, healthcare, and domestic-focused small caps may offer more resilience.

Pro Tip: Look into sectors that are less exposed to global trade and more dependent on domestic consumption.

3. Do Keep an Eye on Currency Movements

Trade wars don’t just affect tariffs — they also influence currency values. A weakening Chinese yuan or strengthening U.S. dollar can have significant implications for importers, exporters, and international investors.

Action Item: If your business or portfolio has international exposure, consider hedging strategies or currency diversification.

4. Do Focus on What You Can Control

In uncertain times, double down on what you can manage — like reducing debt, tightening business expenses, or increasing personal savings. These habits build financial resilience, regardless of macroeconomic shifts.

Bonus Tip: Use the uncertainty as a motivator to review your financial plan. Are your emergency funds solid? Is your retirement plan still on track?

Final Thoughts

Trade wars create winners and losers, but rash decisions often turn temporary challenges into long-term setbacks. By avoiding emotional reactions and focusing on smart, proactive strategies, you can position yourself — and your business — to weather the storm and emerge even stronger.

Whether you're an investor, a business owner, or simply trying to protect your family's finances, these two don’ts and four dos can help you navigate through the noise and make grounded, confident decisions.

Want more tips on navigating economic uncertainty? Subscribe to our newsletter for actionable financial insights every week.

Comments

Post a Comment

Popular posts from this blog

3 Big Energy Stocks Offering Strong Dividends Amid Volatility

Image
3 Big Energy Stocks Offering Strong Dividends Amid Volatility By Steven Orlowski, CFP, CNPR In a market marked by persistent uncertainty, rising interest rates, and geopolitical tensions, income investors are seeking stability and yield in all the right places. One sector continues to stand out: energy. While oil and gas prices remain volatile, the long-term demand outlook and disciplined capital strategies have turned several major energy companies into dividend powerhouses. Here are three energy giants offering robust dividend yields and resilient fundamentals, making them attractive options for investors seeking income and relative stability in turbulent times. 1. ExxonMobil (NYSE: XOM) Dividend Yield: ~3.4% Market Cap: $470+ billion ExxonMobil is one of the largest integrated oil and gas companies in the world. Its scale, upstream and downstream operations, and global reach offer a level of diversification that helps buffer against short-term price swings. In recent year...
Read more

Stocks making the biggest moves midday: Eli Lilly, Alphabet, Hertz, UnitedHealth and more

Image
  Stocks Making the Biggest Moves Midday: Eli Lilly, Alphabet, Hertz, UnitedHealth, and More ​ As of midday on Thursday, April 17, 2025, U.S. stock markets exhibited mixed performance, with significant movements in several key stocks. The Dow Jones Industrial Average dropped nearly 400 points, primarily due to a sharp decline in UnitedHealth Group shares. Conversely, the S&P 500 and Nasdaq Composite showed modest gains. ​ Eli Lilly (LLY) – Soaring on Weight-Loss Pill Success Eli Lilly's stock surged by up to 17% following the announcement of successful phase-three trial results for its new weight-loss pill, orforglipron. This once-daily oral medication demonstrated effectiveness comparable to injectable alternatives like Novo Nordisk's Ozempic, leading to an average weight loss of 16 pounds (about 8% of body weight) and a reduction in A1C levels by 1.3% to 1.6%. The promising results have investors optimistic about the drug's potential market impact. ​ United...
Read more

Stock Spotlight – Stock of the Week: UnitedHealth: Where Does the Company Stand After the Storm?

Image
  Stock Spotlight – Stock of the Week: UnitedHealth: Where Does the Company Stand After the Storm? UnitedHealth Group (NYSE: UNH), a cornerstone of the American healthcare industry, has weathered its share of challenges over the past year. From regulatory pressures and increased utilization costs to a rapidly evolving competitive landscape, investors have had plenty to digest. But as the dust settles, one question remains: Where does UnitedHealth stand now—and is it still a buy? A Quick Look Back: Navigating Headwinds 2024 was a turbulent year for UnitedHealth. The company faced mounting pressure from multiple fronts: Rising medical costs , particularly in its Medicare Advantage segment, dented margins. Regulatory scrutiny intensified, especially around pharmacy benefit management (PBM) practices and alleged anti-competitive behavior. The change in utilization patterns , with more seniors returning to in-person care post-pandemic, increased short-term claims expenses. ...
Read more