When governments add tariffs (extra taxes) to imports, the prices of those goods go up. For example, when washing machines were hit with tariffs in 2018, their prices in the U.S. jumped 12% in just a few months. Tariffs make things more expensive for businesses and families, which can increase inflation (higher prices overall).

Key Takeaways on Tariffs:

1. Tariffs Raise Prices: They act like a tax, making imported goods more expensive.
2. Historical Examples: In the past, tariffs have hurt the economy. For example:
• In 1930, the Smoot-Hawley Act raised tariffs, leading to a big drop in global trade and worsening the Great Depression.
• More recent tariffs on steel in the 1980s and 2000s helped steelmakers but hurt other industries using steel, like car manufacturers.
3. Today’s Impact: Trump-era tariffs have made some industries, like steel, stronger but caused higher costs for other businesses and created uncertainty in global trade.
   
   

How This Connects to Investing

Under a potential second Trump administration, we expect these policies to continue:

• More Tariffs: Higher costs for imports could push prices up across the board.
• Tax Cuts and Deregulation: Trump is likely to cut taxes for businesses and loosen regulations, which can boost profits for companies. This is good for stocks in the short term but might increase the national debt in the long run.