• Should we be worried about tariffs and inflation?
• A couple of days ago, President Trump gave a press conference and journalists asked if these tariffs to try to extract economic benefit out of Mexico and Canada and China.
• His answer was no, not at all.
• He said the tariffs were about the border and fentanyl.
• He wants them to secure the borders and to keep fentanyl out of our country, because it’s killing 1000s and 1000s of Americans and bringing in a lot of illegal immigrants.
• In his first term, he threatened sanctions if Mexico didn’t secure the border, and they did.
• So, it should be the same this time around too.
• Therefore, 25% tariffs that he’s talking about may not even need to be implemented.
• The challenge for Canada is that the number of people that are coming across the border is growing rapidly by about 300% a year.
• So President Trump is trying to nip it in the bud before it becomes a huge problem.
• Canada should be able to secure the border as well, and then no need for the 25% tariffs there either.
• When they asked him about the 10% he wants to put on China, the answer was the same.
• Apparently, fentanyl originates out of China.
• Trump said that he had a deal with President Xi but apparently, when the transition to Biden happened, it kind of fell on the cutting floor and didn’t get done.
• But if they had a deal, then they should be able to pick up where they left off.
• So, we don’t think that these three big tariffs that are in the news all the time are going to be ones that will be long term and that will be inflationary.
• Tariffs are inflationary because it’s a tax on products that are coming in from abroad.
• A tariff on them makes them more expensive, and therefore people buy less.
• That’s inflation, right?
• But, when President Trump was in his first term, he had tariffs and we had very low inflation during that time.
• He also wants to lower the price of oil and energy.
• If he does, then the cost of groceries, gas, heating your home, etc. will go down.
• If those do, that’s deflationary, and therefore will probably more than compensate for whatever inflationary effect that the tariffs may have.
• In our view, inflation due to the tariffs will be offset by other things, and the tariffs will be temporary.
• If those things do happen, then inflation should start to come down over the next three or four months.
• If inflation starts to come down, the bond market and the stock market will like it a lot.
• It seems like the bond market and the stock market are tethered to what inflation is doing, and, more importantly, what the Fed is going to do about it.
• Overall, we think this is going to be a good year.
• We’re going to have our fearless forecast for you next week.
• In the meantime, want to reiterate the importance of our Invest and Protect Strategy.
• At any time, something could pop out of nowhere and cause the market to go down dramatically.
• As you may remember, our strategy said to sell the day before the pandemic was announced, so we avoided the market dropping like a stone when the pandemic was announced and the weeks after that.
• We hope that gives you peace of mind!
• Please share this video with your friends, your family, or anybody that you think we might be able to help.

Hello SCWPerS Nation and clients. Welcome to our market alert video for today, which is January 24 2025 and I hope this video finds you healthy, wealthy and wise, and that all is well with you and yours. It’s so nice to have you. Thank you for watching. I want to talk with you in this episode of our market alert video about tariffs and inflation and whether we should be worried about that. Okay, a lot of clients have been asking and so I want to go over that with you. So let’s dive into it. So a couple of days ago, President Trump gave a press conference, and they were asking him about the tariffs, and they said, you know, are these tariffs to try to extract economic benefit out of Mexico and Canada and China? And his answer was no, not at all. He said, This is about the border and about fentanyl. So basically, what he said is that he wants them to shut to secure the borders and to keep fentanyl out of our country, because it’s killing 1000s and 1000s of Americans and bringing in a lot of illegal immigrants. So basically, let’s examine that. So first of all, let’s look at Mexico. Well, in his first term, he threatened sanctions if they didn’t secure the border, and they did. So what’s it should be the same this time around too. They showed they could do it so they probably can do it again. So therefore the 25% tariffs that he’s talking about may not even need to be implemented. They may just say, Okay, we’ll do it. And then we’d look at Canada. Well, you know, Canada’s problem. The challenge for Canada is not as big as the number of people that are coming across the border from Mexico. It’s relatively small. But the problem is, pardon me, it’s growing rapidly. What I read was that it’s growing by about 300% a year. So what President Trump is trying to do here is nip it in the bud before it becomes a huge problem. And therefore, if it’s not a huge problem, yet, Canada should be able to secure the border as well. And therefore no need for the 25% tariffs there either. Now if we look at China, and they asked him about the 10% he wants to put on China, and the answer was the same, no. What we’re doing there is we don’t want fentanyl coming into our country, and apparently it originates out of China. And Trump said that, yes, he had a deal with President Xi. They were ready to go. Xi agreed about that. But apparently, when the transition to Biden happened, it kind of fell on the cutting floor and didn’t get done. But if they had a deal, then they should be able to pick up where they left off. I mean, if Xi agreed to it before, then why wouldn’t he agree to it now? So we don’t think that these, these three big tariffs that are in the news all the time are going to be ones that will be long term and that will be inflationary. Now the question you may ask is, are tariffs inflationary? Well, yeah, they are, because basically it’s a tax on dollar on products and services or products that are coming in from abroad. And so if they are taxed, if they have a tariff on them, then it makes them more expensive, and therefore people buy less. That’s inflation, right? So inflation is certainly that. But let’s look at history. When President Trump was in his first term, he had tariffs going on then, and they we had very, very low inflation during that time. So therefore we could extrapolate from that, that it is not a foregone conclusion that if you have tariffs, that you’re going to have high inflation. The other thing also is that, you know, he’s talking about drill, baby, drill. Well, what that means is, you know that he’s what he wants to do is lower the price of oil and energy. And if he does, then the cost of groceries, the cost of gas, heating your home, those kind of things will go down. If those do that’s deflationary, and therefore will probably more than compensate for whatever inflationary effect that the tariffs may have. So you put it all together, and in our view, inflation due to the tariffs will be offset by other things, and the tariffs, in our view, will be temporary anyway. Now if, in fact, those things do happen, which we think there’s a high probability of them in fact happening, then inflation should come, start to come down, and we should see it over the next three or four months, as we’ve said in previous videos. And if inflation starts to come down, and it’s nice and doing that, then guess what? The bond market and the stock market will like it a lot. It seems like the bond market and the stock market are tethered to what inflation is doing, and, more importantly, what the Fed is going to do about it. So you may have noticed that a couple three weeks ago, the jobs numbers came in hot. Oh no, that’s inflationary. Oh no, the Fed’s now going to raise interest rate, and the market tanked. Well, then what happened? Well, the inflation numbers came in and they were benign. Oh well, maybe inflation is going to go down and the Fed will now lower interest rates, and we saw the market go way up. So and the bond market along with it, so they seem to be tethered to each other. And there and moving in tandem. This is kind of a continuation of a pretty rare occurrence, which is that stocks and bonds move in tandem. But be that as it may, our view is that the inflation outlook is positive, meaning inflation should cool down. Trump’s policies should be beneficial for business and also for that inflation picture, and overall, we think this is going to be a good year. So we’re going to have our fearless forecast for you next week. Now, in the meantime, want to reiterate the importance of our Invest and Protect Strategy. We never want to go I’ll call it naked when it comes to risk, right? Because at any time, something could pop out of the woodwork out of nowhere, and cause the market to go down dramatically. As you guys remember, our strategy said to sell the day before the pandemic was announced and when the pandemic was announced, and the weeks after that, the market just dropped like a stone. And we avoided all the drop that came after that by having our strategy. So I hope it gives you the peace of mind that it does me because I I invest my money. I use our strategy as well. I’m in the same boat with you. You know the old thing about I eat my own my own cooking, and so therefore, I hope you have the peace of mind that it gives, that it gives me and us, knowing that we have a strategy to help protect you, and that’s what we want to do. We want your money to last as long as you do, and we want you to go out and enjoy your second childhood without parental supervision. And for those of you who are not SCWPerS yet, we’re gonna get you there. If it’s the last thing we do, that’s our goal. So share this video with your friends, your family. Please introduce us to anybody that you think we might be able to help. You know, business is great. We’re happy, but we’re always looking for more, and if you can help us, that would be fantastic. So thanks for watching this video, and as I always say, I hope it finds you healthy, wealthy and wise, and we’ll talk soon.

Please note: transcript has been modified after the time of recording. 

Economic indicators and stock market performance cannot be predicted. Opinions expressed regarding the economy and the stock market belong solely to Ken Moraif on behalf of Retirement Planners of America and may not accurately portray actual future performance of the economy or stock market outcomes. Opinions expressed in this video is intended to be for informational purposes only and is not intended to be used as investment advice for individuals who are not clients of Retirement Planners of America. All content provided is the opinion of Ken Moraif, CEO and Founder of RPOA Advisors, Inc. (d/b/a Retirement Planners of America ) (“Retirement Planners of America”, “RPOA”). ©Copyright 2023