Small orange sphere centered against abstract teal background.
Markets and economy

Unfolding trade situation calls for investor discipline

2 minute read   •   April 03, 2025
success

You have saved this article

Markets and economy
Market volatility
Page
Article
Economic outlook
Forecasts

Although the U.S. tariff announcement on April 2 adds some clarity to the administration’s tariff stance, the situation remains fluid.

All other factors being equal, higher tariffs and other barriers to trade are apt to slow economic activity and lift inflation rates—at least in the short run.

In the intermediate to longer term, however—the latter period being the most important one for investors—trading partners are likely to adjust their policies. Representatives of affected countries are likely to negotiate with one another. Further policy adjustments may follow. Companies and consumers may reconsider their saving, spending, and investment options. Central bankers may reconsider their policies in pursuit of sustainable economic growth and stable prices. In short, a dynamic global economy almost certainly will adjust.

For investors, uncertainty may rise and fall—but it is never absent

Vanguard continually analyzes multiple factors to formulate macro- and microeconomic perspectives that help inform our investment management practices around the world. 

We have extensive experience effectively stewarding investors’ assets through geopolitical events and other market uncertainty. We leverage five decades of investment and risk management expertise to navigate such complex scenarios. 

Cautioning investors against tactical portfolio changes

Given potential tariff countermeasures and their effects, Vanguard believes it would be imprudent to attempt to identify specific investment implications immediately following the announcement. Financial markets may respond quickly to developments as they unfold in the near term, but we caution long-term investors against reacting with tactical or short-term changes to well-considered investment plans. 

We will continue, as ever, to monitor evolving economic conditions and share our economic and market perspectives in a timely fashion.

Most Viewed

Ready to invest? See how to open an account
Start with this step-by-step guide to opening a personal investment account, such as a general investing brokerage account or an IRA.
Backdoor Roth IRA What it is and how to set it up
If you are a high-income earner, a Backdoor Roth IRA may be a good retirement investment option for you. Learn what it is and how to set up this type of retirement plan.
Are bonds a good investment right now?
Learn how high-quality bonds can play a valuable role in your portfolio in a high-yield environment.
Top 6 tips: Your year-end financial checklist
Get a checklist with money saving strategies to maximize your end-of-year savings, minimize your tax bill, and start your 2024 financial goals strong.

All investing is subject to risk.