[Christian Harris]

Tariffs are shaking up markets because they create a domino effect of economic challenges.

First, higher import taxes increase costs for businesses, which often pass these expenses on to consumers, driving up prices and potentially worsening inflation.

This puts pressure on the Federal Reserve to adjust interest rates, adding another layer of uncertainty for investors.

Second, tariffs squeeze corporate profits by raising input costs and disrupting supply chains.

Companies in sectors like manufacturing and retail, which rely heavily on imported materials, are particularly vulnerable.

Analysts estimate that every 5% increase in US tariff rates could reduce S&P 500 earnings per share by 1-2%, with broader tariffs potentially shrinking profit margins by up to 250 basis points.

Finally, tariffs fuel fears of escalating trade wars, which could slow global economic growth.

Investors worry that retaliatory measures from trading partners like Canada, Mexico, and China could lead to a prolonged cycle of economic friction.

This uncertainty has triggered stock sell-offs and a flight to safer assets like bonds and gold, as markets brace for potential volatility.

In essence, tariffs are more than just trade tools—they’re economic wildcards that ripple through markets, influencing everything from corporate earnings to central bank policy and investor behaviour.

How do you think this will play out in the coming months? 📉🌍

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[Steve]

I’m unhappy because consumers are likely to bear the brunt of these tariffs. The price level is expected to rise by 1.0-1.2%, equalling an average per household consumer loss of $1,600-2,000.

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[Christian Harris]

Totally get your frustration Steve—tariffs often end up hitting consumers the hardest. 🛒

That $1,600-$2,000 per household loss is no joke, especially when it’s essentially a hidden tax on everyday goods like cars, appliances, and even groceries.

What’s worse, these higher costs come at a time when many families are already feeling the pinch from inflation.

And while the idea is to protect domestic industries, history shows tariffs can backfire, leading to job losses and slower economic growth.

What’s your take—do you think there’s a better way to handle trade disputes without passing the bill to consumers? 🤔

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