As a inventory market investor, I’m upset within the new tariffs President Trump has imposed—10% on imports from China and 25% on imports from Mexico and Canada, together with a 10% obligation on Canadian power imports (oil, pure fuel, electrical energy). If these tariffs persist all yr with out decision, company earnings may take a 2%-3% hit, which implies an analogous drop within the S&P 500 or extra wouldn’t be shocking.
As anticipated, the retaliations got here quick. Canada’s soon-to-be-gone Prime Minister Trudeau hit again with matching 25% tariffs on $155 billion value of U.S. imports, focusing on alcohol and fruit, which may considerably impression main U.S. exporters.
In the meantime, Mexico’s President Sheinbaum rejected Trump’s claims about Mexico collaborating with prison organizations and carried out her personal retaliatory tariffs on U.S. items. She additionally recommended the U.S. ought to deal with combating home drug commerce and cash laundering reasonably than blaming Mexico.
We must always anticipate retaliatory measures from China quickly. Within the final U.S.-China commerce conflict, many American companies and shoppers bore the price of tariffs on Chinese language items by way of larger costs, whereas some Chinese language exporters lowered costs to remain aggressive.
That is the basic “standing at a live performance” analogy—if one individual stands up, the row behind them has to face up too, leaving no one higher off. Tariff wars are inclined to observe the identical sample, so the logical final result is a compromise. The query is: how lengthy will markets need to endure the uncertainty earlier than that occurs?
Commerce Wars Could Increase the Housing Business
Everybody is aware of tariffs harm the worldwide financial system, which is why a rational Trump will probably negotiate a compromise. Nevertheless, with new tariffs on European items additionally on the desk, it’s unclear how shortly world leaders will attain an settlement earlier than shopper confidence takes a serious hit.
Regardless of the market disappointment, as an actual property investor, I see an upside: commerce wars may gasoline a housing growth.
As commerce tensions escalate, capital ought to stream from riskier property like shares into Treasury bonds, pushing yields decrease. If fears of a world slowdown intensify, mortgage charges may drop considerably, bettering affordability and spurring demand for housing.
When housing affordability will increase, so do actual property transactions, transforming initiatives, furnishings purchases, landscaping jobs, and mortgage originations. The housing business is a key driver of the U.S. financial system, sometimes accounting for 15%–18% of GDP. With an current housing scarcity and years of pent-up demand, decrease charges may reignite bidding wars nationwide.

Actual Property As A “Bonds Plus” Funding
I’ve by no means been massive on bonds (~2% of my web value) as a result of I favor higher-risk, higher-reward investments. I see actual property as a bond various, providing potential appreciation, lease will increase, and tax benefits. Over the previous 22 years, my actual property holdings have outperformed Treasury bonds and the mixture bond index, and I anticipate that to proceed.
In fact, proudly owning bodily actual property isn’t passive. This previous weekend alone, I spent three hours portray my previous home after my tenants moved out. Subsequent up: changing grout, energy washing, deck touch-ups, and landscaping the entrance yard. Whereas I take pleasure in presenting a terrific product, the upkeep work takes time away from different pursuits.
As I grow old, I discover myself naturally shifting towards extra on-line actual property investments and away from bodily property possession. The attraction of a less complicated, lower-maintenance life is rising—similar to the housing market would possibly if mortgage charges drop.
Taking Benefit of the Inventory Market Promote-Off
Throughout his earlier time period, former President Donald Trump initiated main commerce conflicts, most notably with China, beginning in July 2018. The U.S. imposed tariffs on roughly $550 billion value of Chinese language items, whereas China responded with tariffs on about $185 billion value of U.S. items. The tensions induced market volatility earlier than culminating within the Section 1 commerce deal in January 2020, which eased some disputes.
On July 18, 2018, the S&P 500 stood at 2,800 earlier than promoting off to 2,485 by December 18, 2018—an 11% decline. Nevertheless, by January 2020, the market had rebounded to 3,300, delivering a formidable 32% achieve. If historical past repeats itself, a 10%+ correction may current a robust shopping for alternative.
Market pullbacks all the time really feel painful within the second, however they’re nothing new. Since 1950, the S&P 500 has skilled a correction (declines of 10% or extra) roughly each 19 months. Since 1980, the common intra-year decline has been 14.3%, making double-digit drops comparatively frequent. In the meantime, bear markets (declines of 20% or extra) happen about as soon as each six years on common.
On condition that I am presently underweight public equities, I’m wanting to purchase the dip. However what excites me much more? Shopping for the dip for my children—a transfer I hope they’ll respect 10-15 years down the highway after they’re in highschool or faculty.
U.S.A. Will Win The Battle
In a recreation of rooster, who wins? Clearly, the largest participant with the best capacity to face up to a collision. I anticipate different nations to concede to lots of our calls for in the event that they wish to keep away from spiraling right into a recession.

Readers, how lengthy do you assume this commerce conflict will final? Will it push capital into actual property and drive residence costs larger? How are you positioning your investments?
Disclaimer: This isn’t funding recommendation to you, solely my ideas about how commerce wars can have an effect on completely different threat property. Please do your individual due diligence and make investments in accordance with your threat tolerance and monetary targets.
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