Market Update: Navigating the 2025 Tariff Situation and Market Conditions
- Interchange Capital Partners
- Apr 4
- 4 min read
By Brian Baum, CEPA®, CFP®
Current Market Environment
This week, the United States implemented significant trade policy changes, including a universal 10% tariff on all imports alongside targeted tariffs of up to 54% on countries like China and the EU. This action has prompted responsive measures from global trading partners:
China has implemented countermeasures on U.S. goods and restricted certain exports.
The European Union has announced plans for reciprocal tariffs on U.S. products.
Canada and Mexico face new duties on specific goods, despite maintaining partial exemptions.
The economic implications include supply chain adjustments, increased consumer prices, and market volatility. Global economic impact estimates suggest costs could exceed $1.4 trillion, with particular effects on import-dependent industries such as technology and automotive sectors.
While negotiations could potentially reduce these rates, tariffs at elevated levels introduce considerations regarding growth, inflation, and corporate earnings. Current analysis does not indicate these tariffs will create a recession in the U.S. given economic fundamentals and consumer balance sheets. However, they may result in lower growth and higher inflation.
This shift in trade policy represents a significant change in global economic relationships.
Why Our Strategy Is Designed For These Conditions
Our belief is that market fluctuations validate the SLG™ (Spend-Live-Give) framework implemented for your portfolio, which was specifically designed to address varying market conditions.
Spend: Your Protection Component
Your Spend allocation, with its 3-year reserve of secure, short-term investments, is designed to serve as a buffer during market fluctuations. This strategic reserve helps prevent the need to liquidate growth assets during unfavorable conditions to fund near-term expenses, providing assurance that immediate financial needs remain addressed.
Live: Balanced Through Fluctuations
The diversified nature of your Live allocation—spanning global fixed income, equities, and liquid alternatives—is formulated to provide stability during market adjustments. While this portion of your portfolio will experience some variability, its balanced construction helps moderate overall risk while maintaining potential for recovery.
Give: Positioned For Long-Term Potential
Market adjustments can create entry points for patient capital. Your Give allocation, focused on growth potential and alternative investments, is positioned to potentially benefit from current market conditions and valuations in both public and private markets.
The Potential Ahead
Historical data indicates that markets often respond to geopolitical and trade developments in the short term. The current environment may present opportunities for investors with appropriate time horizons.
For clients with available investment capital, current conditions may offer entry points across various asset classes. We are available to discuss specific opportunities aligned with your individual SLG™ framework.
Next Steps
Our team is monitoring markets and making appropriate adjustments within your existing allocations. If you have questions about your portfolio, additional capital to invest, or would like to review your overall strategy in light of recent developments, please contact us.
We value your partnership. The current environment demonstrates the importance of structured investment approaches.
Disclosures
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