Keeping Focus: The Knowns and Unknowns of Tariff Policy

While walking my dog over the weekend, I noticed how green the grass has become this past week as spring continues to bloom. It made me realize that every year I feel the same sense of optimism when the grass changes from brown to green. Obviously, I knew in advance that this seasonal change was coming—and still, I found myself a touch surprised when it happened. As my walk continued, I started thinking about what else I know and don’t know, and my thoughts quickly drifted to what’s happening in the market.

Let’s cover the basics of what we DO know. Last week, the Trump administration announced a set of tariffs or duties on goods produced in other countries. These tariffs turned out to be much larger than what the market anticipated and set off a large selloff over several trading days. On April 7, the stock market reached bear market territory, which is a 20% drop from a recent market high. All of this happened very quickly. 

As I thought about our clients and their financial and investment plans, I realized there is a chance to help people understand why long-term plans still make sense based on three things we DON’T know. 

Are the tariffs a negotiating strategy with other countries? President Trump and his trade representatives have said no—these tariffs are for real. The administration wants businesses to move their manufacturing back to the U.S. and believes levying these tariffs is the right incentive to make this happen. 

But President Trump has always been a proud negotiator and loves to take credit when he can strike what he believes is a good deal. Vietnam, for example, has allegedly offered to drop all tariffs that have restricted the flow of U.S. goods into Vietnam. Essentially, they are offering zero tariffs bilaterally, which would be considered by many to be a good deal, creating hope that other countries would consider following suit. The early spike in the market on April 8 came on the heels of the administration suggesting it may, in fact, be open to negotiations. 

As the WSJ said on April 7, “If markets continue in turmoil, or if a recession looms and his approval rating craters, the President may feel the need for a face-saving escape route. That could be when he decides to spin his tariffs not as permanent but as the genius negotiating strategy his apologists claim it is.”¹

Are the tariffs legally enacted? We aren’t attorneys or experts on the Constitution, but this question is about the justification for his tariffs and whether the president has the power to enact them using the 1977 International Emergency Economic Powers Act (IEEPA). This law gives the president authority to deal with an “unusual and extraordinary threat” if he declares a national emergency. President Trump initially used the fentanyl crisis as justification for the tariffs in February, and then subsequently declared our long-running trade deficit a national emergency. 

Early lawsuits challenging the tariffs are focused on whether there is a connection between across-the-board tariffs and the opioid problem, as well as whether the president has the authority to impose tariffs. Based on the Commerce Clause of the constitution, Congress has historically had the authority to regulate commerce, including authorizing tariffs. Without getting into any further legalese, it wouldn’t be surprising if this question quickly rises to the Supreme Court to decide. 

What else can change? The pace of change since the Trump administration took office in mid-January can be best described as frenetic. There are many ways these policies can evolve, change, or be scrapped as other areas of the president’s agenda take shape. None of us can guess what is next, and it’s best not to try.

A few other items of note that I hope will create some comfort during a time of market stress. 

First, a reminder that our clients don’t own the market. Rather, they own pieces of the most profitable, innovative, and capable companies on the planet. The management teams of these companies continually evolve strategies to reflect the operating environment. While the tariffs are going to impact most every company our clients own, they also change the playing field. We know that it takes clear direction for management teams to evolve how they do business, and we would expect high-quality companies to take the lead in showing how best to compete in the new world—even if it takes time. 

Second, despite international markets lagging the U.S. for an extended time, the early days since the start of 2025 have shown that Europe is not dead. We’ve always focused on keeping our clients diversified in order to maintain exposure to various parts of the market, including international. This is a good reminder why recent history can create a bias against maintaining conviction in the face of lesser returns. 

Finally, the key point I always want to emphasize. You are not alone in this journey through uncharted waters. Your advising team is here to support you. We are available anytime you want to chat. Even when things feel out of control, remember, we have a long-term plan that will be our guide.

Just as the world around us will continue to change as we progress through spring to the summer ahead, so too will the market and economic and trade policies shift and evolve in the weeks and months to come. I will continue to stay focused on the things we know and the things we don’t, as well as those variables that are within our control and those outside of our control. Thank you for trusting the Curi RMB Capital team to walk this road alongside you as we continue to prioritize the vision and goals that guide your financial plan. Please keep reaching out and asking questions—we’re here to listen and discuss as your trusted advisor.