The Skinny On Tariffs: Should Retirees Be Concerned?

Tariffs are front and center in the news and on the mind of many investors. Since most folks are neither experts in international trade nor economic historians, it’s worth giving a bit of background on tariffs, how they may impact your nest egg, and what investors should do at this juncture.

Historically, tariffs that were used as a long-term strategy were not good for the economy or the market. For context, the Smoot-Hawley Tariff Act of 1930, signed into law by President Herbert Hoover, raised tariffs on imported goods in order to protect American businesses and farmers. The act increased tariffs by an average of 40–60%, which led to a decline in global trade of 65%. The fact that it was more expensive to sell goods from foreign countries caused many countries to stop shipping their products to the United States. The ramifications of this act contributed to the worsening of the Great Depression.