Tariffs: so hot right now.

But that’s not a good thing.

The U.S. government has decided to launch a barrage of tariffs on its largest trading partners: Canada, Mexico, and China.

In return, Canada Mexico, and China are doing the same.

Three questions:

1. Why?

2. What will the tariffs do?

3. What comes next?

And if you want to know more about what tariffs are, check out our previous newsletter: Trump ❤️'s tariffs.

Why tariffs?

Trump says tariffs will:

1. Boost U.S. manufacturing

2. Protect domestic jobs

3. Raise tax revenue

4. Grow the economy

Maybe in the long-term? They also have the effect of putting other countries on edge immediately and make them more willing to negotiate in other areas. Coincidence?

What will they do?

Short-term, they’ll make products more expensive.

Which ones?

• Electronics (US imported $150 billion worth from China in 2024)

• Cars (US imported $100 billion worth from Canada and Mexico in 2024)

• Oil/gas (US imported $100 billion worth of energy product from Canada in 2024)

One of the biggest ones to be concerned about is steel:

The US is the world’s largest importer of steel. Making two of their top three suppliers 25% more expensive will have a significant impact on construction costs — costs that haven’t really fallen at all since the COVID supply constraints:

Long-term? They make companies want to produce their products in the US so they can more easily sell to the US market. Samsung and LG are considering doing exactly that.

What happens next?

The stock market hates uncertainty, and right now we have plenty of that.

The U.S. stock market has fallen 6% for its February highs and is pricing in “Extreme Fear” according to CNN.

What does that mean? The stock market is scared about what’s going to happen next.

When’s the best time to buy? When everybody is scared.

Boo!

Will it keep dropping? Literally nobody knows for sure, so be suspicious of anyone that claims to.

Time will tell

All we can really do is wait at this point. To avoid the impact, try buying domestic products. If you’re in the US, check out Cultivate to shop for goods made domestically.

Fewer jokes today, apologies. Here’s one that I hope makes up for that:

What’s orange and sounds like a parrot?

A carrot.