Tariffs + Transitions: A Tomoro Perspective on Policy Shifts, Market Psychology, and Long-Term Planning

Insights

Understanding Market Anxiety and Looking Past the Headlines

Tariffs make headlines. Markets react. Emotions spike.
But smart owners and wealth builders know to look deeper. At Tomoro, we believe that clarity is power—and success starts with context.

Let’s start with what just happened:

• On April 2, 2025, the U.S. government announced sweeping tariff hikes, sending the effective rate on global imports from ~3% to nearly 20%. Certain nations—particularly China—saw rates exceed 50%.
• Markets dropped sharply on April 3, posting the largest single-day decline since March 2020.
• Then came the surprise: on April 9, the administration hit pause on a wide swath of those tariffs—excluding China—for 90 days. Stocks soared. The S&P 500 posted a historic 9.5% rally in a single day.

This is what we mean by emotional whiplash in the markets. But here’s the Tomoro lens:

Markets are driven by expectation vs. reality, not just by headlines.
The more punitive the starting point, the more upside is possible as things moderate.

Why Staying Invested Still Wins

This isn’t the first time markets have panicked over policy—and it won’t be the last.

Here’s what history shows:

• If you invested $10,000 in the S&P 500 on Jan 1, 1980, but missed the 5 best days in the market, your total return would be over $500,000 lower.
• 70% of those “best days” come within two weeks of the worst days.
• From the 1987 crash to COVID-19, the market has rewarded long-term discipline—especially during short-term fear.

Missing the rebound is often more damaging than enduring the decline.

Image Source: Zacks Investment Management

Let’s Talk About the Tariffs Themselves

Clients and owners span all viewpoints. Our job isn’t to make the issue political.
It’s to understand the implications—on value, growth, and exit—and guide accordingly.

Here’s how we frame both sides:

If You Want to Make the Pro-Tariff Case

• Strategic Leverage: Tariffs create negotiation leverage to secure better trade terms or drive domestic investment.
• Revenue Generation: $600B in potential new revenue could help finance tax cuts or reduce deficits.
• Currency Balance: A strengthening U.S. dollar may offset import price hikes.
• Reshoring Incentives: Permanent tariffs can encourage companies to build more—and source more—within the U.S.

If You Oppose Tariffs

• They’re Still Taxes: Ultimately, consumers and businesses pay—directly or indirectly.
  
• Inflation Risk: A 20% effective rate could reignite inflation above 3%, tying the Fed’s hands on rate cuts.
  
• Growth Headwinds: Tariff-induced uncertainty can dampen consumer confidence and slow capital spending.
  
• Market Disruption: Higher yields (from sticky inflation) can put real pressure on equities.
  

What Changed on April 9—and What It Might Mean

The 90-day pause on most tariffs (except China’s) is being positioned as a negotiation window. Here’s what we might expect:

• Short-Term Calm: The market welcomed the pause—but volatility could return as we approach the 90-day mark.
• Selective Pain: Tariffs on Chinese goods remain high, which may drive cost increases for tech, consumer electronics, and textiles.
• Geopolitical Repositioning: Countries like Canada and Japan are scrambling to renegotiate trade and defense agreements with the U.S. to secure exemptions.
• Long-Term Uncertainty: Without clear policy direction, business planning remains harder—and that impacts valuations.

The Bottom Line for Owners and Long-Term Investors

Whether you support tariffs or not, one thing is clear:

We’re at a policy maximum. The market is already priced in a worst-case scenario.
Any improvement—deals made, tariffs reduced, exemptions granted—has the potential to unlock upside.

And this is where long-term planning matters most.

Because while markets may swing, our job is to build a strategy that endures.

Information from this email had been inspired from Zacks Investment Management content

If you’re navigating ownership, legacy, and liquidity—and you want to make decisions from a position of strength—we’re here for that conversation.

📩 jsuarez@tomoronow.com
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