Tariffs, Trades and Your Portfolio

Hi, I’m Don Simmons. I want to take a moment to share a few important perspectives on the latest trade developments between the U.S. and China—and what they mean for the markets, the economy, and your financial plan.

There’s been a lot of headline noise lately. Tariffs, trade deals, rate cuts—it can all feel overwhelming. But our job is to look through the short-term noise and focus on what truly matters for your long-term goals.

Let’s start with the big picture.

The recent U.S.-China agreement marks a significant turning point. The new 90-day deal reduces U.S. tariffs on Chinese imports from 145% down to 30%. In response, China is lowering its tariffs on U.S. goods to 10%. That’s a dramatic shift from where we were just a few weeks ago—and a clear sign that both sides want to de-escalate.

We’ve also seen a pause on tariffs involving other key trading partners, and a brand-new trade deal with the U.K. Sound familiar? It should. This mirrors what happened during the first Trump administration back in 2018 and 2019, when aggressive tariffs were used as negotiating tools—followed by new trade agreements.

Unsurprisingly, markets didn’t love the initial uncertainty. After the April 2 tariff announcement, we saw a sharp drop in the S&P 500—what we’d call a “worst-case scenario” response.

But what happened next is just as important.

Markets bounced back. The S&P 500 is now back to where it started the year—and even higher than it was before the tariffs were announced. That’s a reminder: short-term drops are part of investing. Long-term perspective and diversification? Those are the tools that serve us best.

What about the broader economy? There’s actually a lot of good news:

The unemployment rate held steady at 4.2%, and employers added 177,000 new jobs in April—well above expectations. Inflation continues to cool. The Consumer Price Index is now at 2.4%, inching closer to the Fed’s 2% target. Interest rate pressure is easing too. With trade tensions dialed down, the Fed has more flexibility. Markets now expect two or maybe even three rate cuts this year—possibly starting as early as July.

So where does that leave us? It’s simple: stay focused on the long game. Markets will always react to headlines. But they also rebound—often when it’s least expected. What matters most is that your portfolio is designed for times like these, and that your financial plan is anchored to your goals, not to the news cycle.

I’m especially encouraged by how well the repositioning trades we executed in 2024 performed. By locking in capital gains and shifting into alternative investments that “zig” when the market “zags,” we helped protect your portfolio during this recent—albeit brief—market correction. Our strategies led to smaller declines than the overall market, while still participating in the recovery. That’s the value of active management and the power of a multi-strategy approach working together.

 We’ll continue to keep a close eye on the markets and the economy, always with your long-term goals in mind and your best interests at heart.

As always, if you have questions about your specific situation, or simply want to talk through next steps—I’m here for you.

Thank you, truly, for the trust and confidence you place in me and my team. Let me leave you with this quote from Robert Arnott, founder and chairman of Research Affiliates, in Newport Beach, California. ““In investing, what is comfortable is rarely profitable.”