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 both at home and abroad.
We don’t have to look far for a meaningful data point. A recent 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, they 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 preexisting tariffs remained in place. Despite a wave of forecasts to the contrary, China posted higher cumulative returns than the US and the MSCI World ex USA Index over the four years of Trump’s term.
The graphic below reminds us that markets are forward-looking, and it’s likely that economic impact from initiatives such as tariffs already are reflected in current market prices. When these expected developments come to pass, the effect on markets may be quite uneventful.
Past performance is not a guarantee of future results.
In USD. Data shown from January 1, 2017–December 31, 2020. Growth of wealth shows the growth of a hypothetical investment of $1. Data presented in the growth of wealth chart is hypothetical and assumes reinvestment of income and no transaction costs or taxes. The chart is for illustrative purposes only and is not indicative of any investment.
Performance includes reinvestment of dividends and capital gains. MSCI China Index and MSCI World ex USA Index returns are net dividends. Tariff events data sourced from Reuters. S&P data, © 2025 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. MSCI data © MSCI 2025; all rights reserved. Indices are not available for direct investment; therefore, their performance does not reflect the expenses associated with the management of an actual portfolio.
John, a New Hope, Pennsylvania native, is the Founder and CEO of Rockwood Wealth Management. A former nuclear engineer, he is committed to the development and growth of conflict-free comprehensive financial planning and investment management. John values a client-centric practice and unwavering integrity in all of our endeavors as stewards of our clients' best interests.