One of the focal points following the presidential election is the potential for an increase in tariffs applied to goods produced outside the US. Many investors have wondered what this could mean for markets.

One period offering perspective on this issue is President Trump’s first term in office. Beginning in 2017, the administration eyed China as a target and, by 2018, began imposing tariffs across a range of products. The next couple of years saw back and forth trade discussions that eventually led to an agreement, though pre-existing tariffs remained in place. Despite all this uncertainty, both China and the US posted higher cumulative returns than the MSCI World ex USA Index over the four years of Trump’s term.

Markets are forward-looking, and the economic impact from initiatives such as tariffs is likely already reflected in current market prices. When these expected developments come to pass, the effect on markets may be muted.

exhibit 1

Growth of $1 During President Trump’s First Term

January 2017–December 2020

Past performance is not a guarantee of future results.

What This Means for Your Investments

Here at Prosperity Capital Advisors, we know that discussions about tariffs and trade policy can add another layer of complexity to your investment decisions. While the markets are good at processing this kind of information, it’s natural to wonder how these changes might affect your financial future.

That’s why we recommend The Bucket Plan® approach. We use it to help you stay focused on what really matters — your long-term financial goals — even when policy changes make headlines. Think of it as having a trusted navigator while sailing through sometimes choppy waters.

Ready to take a fresh look at your investment strategy? Connect with a PCA advisor today. We’re here to help you make sense of the market landscape and keep your financial plan on track.

Disclosure: Prosperity Capital Advisors prioritizes client interests with a planning-first approach, offering tailored strategies that account for market unpredictability and varying return patterns. Our dedicated team helps clients avoid common pitfalls such as expecting “average” returns and short-term market timing, ensuring strategies are built around individual goals and long-term investment horizons rather than annual return predictions.

This blog was created based on content from Dimensional Fund Advisors. The original article “Above the Fray: Tariff Trepidation” appeared in Above the Fray, a weekly newsletter for Dimensional clients. Learn more about Dimensional Fund Advisors here. The original post was published on January 30, 2025, and can be found here.