Tariff Wave Ahead: Should You Make Shifts to Your Portfolio?

As of Aug. 2027, the Trump administration has placed tariffs on 60 trading partners.

Because the cost of tariffs tends to be passed on to consumers, the cost of living has increased.

No matter how uncertain everything may seem, now is not the time for knee-jerk reactions.

As of Aug. 4, President Donald Trump has imposed tariffs on 60 vital trading partners, claiming each country has inadequately enforced bans on goods produced by forced labor. Because tariffs raise the price of imported goods and tend to weaken the U.S. dollar, companies that depend on foreign products pass those increased costs on to consumers, leading to inflation and investor confusion.

With Trump's proclivity for pressing tariffs, now may be a good time to focus on how his trade decisions impact your portfolio -- both over the short and long term.

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Knee-jerk reactions to any situation rarely lead to gains. If your portfolio is full of companies you've researched and believe in, there's no reason to turn away from those investments. Historically, staying invested in a diversified portfolio over the long term has produced better outcomes than short-term trading based on market conditions. While current tariffs may negatively impact portions of your portfolio, the longer you hold, the more unsettled periods tend to average out.

Shifts are often unnecessary simply because of the types of investments you hold. For example, if you're invested in U.S.-based supply chains, consumer staples, healthcare, or utilities, your portfolio may have benefited from tariffs due to reduced international competition.