Should You Still Buy Stocks Now That Trump’s Tariffs Are Here?

The U.S. stock market has taken a hit—and many investors are wondering if now is the time to panic or to act with purpose.

The SPX500 Index had dropped by 11% from its recent high, erasing more than $5 trillion in market value. This downturn wasn’t just due to typical market ups and downs. It came on the heels of a major shift in U.S. trade policy led by President Donald Trump.

So, what exactly changed—and what does it mean for your money?

What’s Happening With the U.S. Trade Policy?

Since taking office, President Trump has introduced a series of tariffs aimed at countries like China, Canada, and Mexico. These measures have affected goods such as steel, aluminum, and even auto imports.

But the most aggressive move came on April 2, when the White House announced:

• Starting April 5: A flat 10% tariff on most imports entering the U.S.
• Starting April 9: Higher tariffs (called “reciprocal” tariffs) on goods from dozens of countries.

Why is this such a big deal? These new tariffs would raise the average tax on imported goods to 22%—a level not seen since the early 1900s.

How Are Investors and Experts Reacting?

Market analysts didn’t hold back. They described the tariffs as being “worse than the worst-case scenario.” And Fitch Ratings warned that this aggressive policy shift could trigger a global recession.

Naturally, investors are spooked. But before making any decisions, it helps to look back at history.

What Can We Learn From Past Tariff Hikes?

Has anything like this happened before? Yes—and the market’s response each time can help guide today’s investors.

From 1955 to 1962, U.S. tariffs rose from 5.9% to 7.6%. This small increase led to four market corrections and two bear markets. The worst downturn saw the S&P 500 drop 28%.

Between 1980 and 1983, tariffs went from 3.1% to 3.7%. Again, this tiny increase was followed by two corrections and a 27% decline in the index.

From 2017 to 2019, tariffs increased from 1.4% to 2.7%. That’s less than a 2% jump. Still, it triggered two market corrections—one of them wiping out nearly 20% of the S&P 500’s value.

So what do these examples show us? Even small tariff increases have been enough to send markets into a tailspin. That makes today’s proposed 19-point jump look even more dramatic—and potentially more damaging.

Should You Be Worried About a Long-Term Crash?

Tariffs indeed raise the cost of goods, which can hurt corporate profits, slow economic growth, and eventually impact jobs and consumer spending.

JPMorgan Chase explains it well: “Tariffs raise prices, slow growth, cut profits, increase unemployment, and create global tension.”

But here’s something just as important: Markets have always recovered.

While the short term may look rough, the long term often tells a different story. Every correction in U.S. history—no matter what caused it—has been followed by a rebound. The S&P 500 has always managed to recover its losses and reach new highs.

What Should Smart Investors Do Right Now?

If you’re asking whether now is the time to sell everything, the answer is likely no.

In times of market fear, legendary investor Warren Buffett has always advised: “Be fearful when others are greedy, and be greedy when others are fearful.”

That means avoiding emotional decisions. Instead, look for strong companies that you believe in. If prices drop, it may actually be a smart opportunity to buy shares at a discount—not run for the exits.

Big policy changes like these can feel overwhelming, especially when they come with headlines about falling markets and rising global tensions. But historical data gives us a clear pattern: short-term drops don’t erase long-term potential.

So, should you buy stocks while tariffs shake the market?

If your goal is long-term investing and you choose your stocks wisely, the answer might be yes.

Just remember: markets don’t like surprises—but they do reward patience.