March 2025
The stock market experienced another sharp decline today following the implementation of new tariffs by the administration on imports from Canada, Mexico, and China. In response, China and Canada swiftly imposed retaliatory tariffs, while Mexico announced plans to reveal its own countermeasures on Sunday. These developments have escalated global trade tensions, adding to the uncertainty that has impacted financial markets.
Investor concerns have grown as the trade dispute intensifies, compounded by the administration’s recent decision to suspend military aid to Ukraine. The S&P 500 fell 0.7% at the opening of trading, extending Monday’s 1.8% decline—the steepest drop this year. European markets also saw losses, particularly in sectors with significant exposure to trade, such as automotive manufacturing.
Impact of New Tariffs
The administration’s latest tariffs include an additional 10% levy on imports from China and a 25% tariff on most imports from Canada and Mexico. While these measures may encourage domestic manufacturing, they also risk straining supply chains, increasing costs for businesses and consumers, and testing diplomatic relationships.
- China’s Response: Tariffs of up to 15% on key U.S. agricultural exports, including wheat, corn, soybeans, and dairy, along with trade restrictions on 15 American companies.
- Canada’s Response: A 25% tariff on $30 billion worth of U.S. goods, with plans to extend tariffs to an additional $125 billion in imports over the coming weeks.
- Mexico’s Position: President Claudia Sheinbaum has rejected the U.S. administration’s claims regarding drug cartel activity and announced that retaliatory tariffs would be revealed on Sunday if the new U.S. tariffs remain in place.
Looking Ahead
At this point, the broader economic impact of these policy shifts remains uncertain. On one hand, an escalating trade war could weigh heavily on economic growth and market confidence. On the other hand, significant market reactions may prompt a policy reversal, potentially stabilizing financial conditions.
We understand that market volatility and negative headlines such as these can be concerning. Historically, making abrupt portfolio adjustments in response has not been a prudent strategy. When uncertainty is high, diversification becomes more important, and your custom SilverPeak portfolio was designed for resiliency over the long term. We will continue to closely monitor these developments and will provide guidance if adjustments to your investment strategy become necessary.
As always, please feel free to reach out to your advisor with any questions or concerns.