By Kyle Plotkin
Investment Advisor Representative
[email protected]
As Rob discussed in this space last week, the stock market has mostly recovered from the initial shock of President Trump’s “Liberation Day” tariff announcement early last month. Since the President introduced a 90-day pause and reduced the proposed tariff on Chinese goods from 145% to 30%, the major indexes have been notably less volatile. While many analysts and investors welcomed the move, they also caution that we’re “not out of the woods” yet.
JPMorgan Chase CEO Jamie Dimon shared his perspective at an investor conference on Monday, warning of an “extraordinary amount of complacency” in the markets. He noted that the full impact of the tariffs has not yet been felt, and expressed concern that rising prices and supply chain disruptions could lead to stagflation—a period of both high inflation and high unemployment—posing additional risks to market stability and economic growth.
Dimon also cited geopolitical tensions as a growing threat to the global economy. Echoing that sentiment, Citigroup CEO Jane Fraser described the current environment as a “new phase of globalization… less defined by cooperation and more by strategic self-interest.” Her remarks highlight the uncertainty now facing global commerce as the world moves away from the free trade model that has shaped the past several decades.
One company that has been in the spotlight during the tariff debate is Walmart. President Trump recently posted on Truth Social that Walmart and other retailers should avoid raising prices in response to the tariffs. That may be easier said than done. A 2023 Reuters report found that roughly 60% of Walmart’s imports come directly from China. If the cost of those goods increases by 30%, it’s difficult to envision how the company can absorb those expenses without passing them on to consumers.
This puts Walmart in a challenging position. They could reduce their U.S. workforce—currently 1.6 million strong—but such a move would likely affect operations significantly. Realistically, raising prices seems to be one of the few viable paths forward. Ultimately, it’s American consumers who will bear the cost of these tariffs.
What does all this mean for the markets? It’s hard to say. But as long as the tariffs remain in place, more volatility and uncertainty are likely.
Wishing you a safe and enjoyable Memorial Day weekend—and a happy unofficial start to summer!
Kyle