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My Thoughts on the Tariff Situation

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Scrabble pieces spelling out “USA TARIFFS”

The Trump administration has been talking about imposing tariffs against several countries for some time now and on April 2, 2025, they were finally implemented.

The big unknowns were how many countries they would be imposed on and how steep they would be. It was broader and larger in scope than many anticipated. For example, China’s tariffs increased to 54%! That 54% is applied to a broad range of Chinese products such as steel, aluminum, solar panels, and more.

Here is a breakdown of how the tariffs impacted other key countries:

European Union (EU): 20% reciprocal tariff (on top of the 10% baseline, making a total of 30% on EU goods).

Japan: 24% reciprocal tariff (total 34% with baseline).

Taiwan: 32% reciprocal tariff (total 42% with baseline).

India: 26% reciprocal tariff (total 36% with baseline).

South Korea: 25% reciprocal tariff (total 35% with baseline).

United Kingdom: 10% reciprocal tariff (total 20% with baseline, matching the baseline for countries not hit with higher rates).

South Africa: 30% reciprocal tariff (total 40% with baseline).

Brazil: 10% reciprocal tariff (total 20% with baseline).

Vietnam: 46% reciprocal tariff (total 56% with baseline, one of the highest rates).

Canada and Mexico: No new reciprocal tariffs were announced on April 2, but these North American countries are already subject to a 25% tariff on most goods that went into effect on March 4, 2025.

Other countries that are not listed still face reciprocal rates but the individual rates have not been disclosed as of yet.

My Thoughts

Let’s start with the long-term because that’s easier. While Biden didn’t roll back Trump’s first tariffs, it is my guess that a good part of yesterday’s announcement will eventually be rolled back after Trump’s term. If that is true, then a lot of stocks will rebound (assuming all else is equal from a macro standpoint, which it never is in reality).

In the short term, it is much harder to see what will happen. How much of this is bargaining? How will other countries retaliate? There are so many unknowns.

My Conclusion

If Trump doesn’t lower corporate tax rates, we could see a large correction happen (30% or greater from the peak). But if he does, then I forecast that stocks will move to new highs.

He hasn’t mentioned anything definitive on the corporate tax cuts since his State of the Union on March 4. He did say yesterday that, “We will use the money generated from tariffs to reduce our taxes and pay down our national debt.”

I estimate the odds of corporate tax rates declining at some point during the Trump administration is around 55%-60%.

Therefore, given where things are today, I am guessing that there is a 40%-45% chance of a large correction over the next 3-4 years.

If you or anyone you know needs help managing your investment portfolio during this period of uncertainty, please contact us. We can help you navigate the tariff situation, so you can sleep well at night, knowing that your portfolio will do well over the long term across multiple macroeconomic environments.

Disclosure: The information in this report was prepared by WealthArch Investment Services, LLC. Opinions represent WealthArch Investment Services, LLC’s opinion as of the date of this report and are for general information purposes only and are not intended to predict or guarantee the future performance of any individual security, market sector or markets generally. 

This report is not intended to be a client‐specific suitability analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs and investment time horizon.

Investments are not FDIC insured, bank guaranteed and may lose value.


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