The tariff wars between the U.S. and other nations, particularly China, have been a roller coaster, for sure. President Trump says he was able to reach an agreement with China last weekend. As I understand it, we will lower our tariffs from 145% to 30% and China’s tariffs on U.S. goods will drop from 125% to 10%. I also understand this is meant to be a 3 month suspension while talks continue.
A few years ago, I met Joe Zidle, an investment strategist with Blackstone who I have since followed. In this article he says, “Uncertainty is a tariff in its own right—and for now, it’s being priced as a costly one.” As I wrote a few weeks ago, for now, this has mostly amounted to a lot of noise in the market, and no sizable price increases. Still, the market is uneasy and businesses confidence seems to be low. If we are not careful, we will be creating a self-fulfilling prophesy.
I talked about economic uncertainty during The Great Recession, ironically about the same time I started posting here in 2009. The theme still rings true: It’s not all bad. If you are watchful, these times of uncertainty often present new kinds of opportunity. It just takes an open mind and a certain kind of awareness and creativity. The key is to avoid knee-jerk reactions. Over the long run, our U.S. economy is dependable in its growth, and from what I’m reading, we most people aren’t seeing traditional signs of a recession ahead. We need to settle in and keep our minds alert for the next thing. After all, our greatest worries have an uncanny way of never coming to fruition.