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What the US tariffs mean for your investments
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The new tariffs imposed by the US have created a lot of movement in the markets. Black Swan Capital explains what they might mean for your investments as an expat in the Netherlands.



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Contact Black Swan Capital today
David Bellingham
David is CEO, director and one of the client advisers at Black Swan Capital. Based in the head office in Amsterdam, and with 20 years’ experience across Europe, Asia and Australia, he works with expats and international professionals in the Netherlands and across Europe helping them to navigate the world of financial management and guiding them to achieve their most important goals through tailored financial planning and investment management. Read more

What the US tariffs mean for your investments

Paid partnership
Apr 29, 2025
Paid partnership

Since the election of President Trump in the US for his second term, tariffs have been on the agenda, presented as a coercive tool, a threat and an opportunity, depending on whether you are incurring them, imposing them or are protected by them.

The threat of the tariffs, and their actual deployment since April 2025, has sent shockwaves through world stock and bond markets. There is a lot of media attention on this topic right now.

First, we will discuss what tariffs are, then the impact they might have on your investments and your plans, and finally, what you should do about it. 

What are tariffs?

To bring it all back to basics, the clearest definition of a tariff is that it is a tax. It is a tax on goods based on where a product is delivered from and to, and it is paid for entry into a market.

We can use an example to make a point:

Companies in Country A can produce a widget that can be sold around the world for 100 euros. In Country B, a company needs to sell their product for 110 euros to make the same profit. Therefore, companies from country A can export to country B and sell their products at a lower price than the locals. Local manufacturers can’t compete. This is called free trade.

To protect their local manufacturers, Country B imposes a 20% tariff on all widgets brought into their country. Now, imported country A's widgets must sell at 120 euros in country B, making them more expensive than the locally produced widgets.

Who pays the tax?

Whilst it is imposed on companies, ultimately it is usually paid, at least in part, by the consumer who must pay more for goods. That is why it is considered inflationary – see below.

Why would a country impose a tariff?

This is a question economists have debated for as long as there have been tariffs - and economists. It is again the sujet de jour.

Some of the main reasons that a country will impose tariffs are:

  • To protect local industry and try to protect local workers
  • To attempt to restore equilibrium or a trade balance, so that two countries import and export similar volumes or values of goods between them
  • To protect against unauthorised (cheaper) copies of goods
  • To reflect a distaste against a political, social or economic regime
  • To raise tax revenue

These are generally the arguments for why a tariff should be implemented.

Counter arguments

There are also counter-arguments as to why tariffs are not efficient. Here are some:

  • Tariffs are inflationary: they push prices up everywhere.
  • One country imposing a tariff can lead to retaliatory tariffs from other countries, pushing prices up everywhere.
  • Using a tariff for the purpose of protecting an industry runs contrary to laissez-faire, or free market economics.
  • Whilst tariffs may be good for workers in protected industries, they can be bad for consumers (these are often the same people), as goods cost more.
  • Many economists posit that it is an inefficient tax as it raises less tax revenue proportionate to the constraint it places on a market; counter arguments suggest a consumer tax, like a VAT, is more effective in raising revenue.

One of the major arguments against tariffs is more ideological. According to these critics, by using a tariff for the purpose of protecting an industry, it runs contrary to laissez-faire, or free-market, economics. Generally, democratic governments, particularly those of the political leanings of the US Republican party, advocate for free markets, less interference, and fewer regulatory obstructions.

The argument goes that if an industry requires protection in the form of tariffs, it is not efficient. Free market economists state that the country should not support inefficient industries, that it should buy the item where it is produced more efficiently and focus on areas where they have a competitive advantage. This argument presumes and requires a level playing field, which, in reality, is not the case.

What does it mean for your investments?

The markets' initial reaction to the 2025 tariffs has been negative, from a fear that it will be inflationary and restrict international trade. The investment sector, which is driven by institutional investors and sentiment, thinks company profits may fall because of tariffs, and as such, markets have fallen. This is where the debate gets complex because tariffs should protect the US industry, which should see its profits grow, which would lead to a stock market rally.

When you consider the largest companies listed on the US stock markets, much of their business, revenue and profit comes from international and not domestic markets. And so, with the fear that there will be retaliatory tariffs and a slowdown in economic growth, stock markets have fallen.

In the short term, markets are volatile. In the long term, they grow. But they don’t grow in a straight line. The likelihood of a negative return from one day to the next when investing in stocks is over 49%! However, the risk of a negative return from investing in stocks over ten years is almost zero. Time reduces risk.

History illustrates that after markets rally, they will fall, and that after they fall, they will grow again. But over time, they do increase in value, which leads to real wealth creation.

We have also seen volatility in bond markets recently. Generally, as short-term concerns mount in relation to stocks, defensive assets, such as government bonds, can increase in value. The concern around bonds in the context of tariffs is their inflationary impact. If tariffs do cause sustained inflation, central banks may be required to increase interest rates again. In the absence of this, if interest rates continue to trend down, that is considered good for bonds.

What should I do about it?

It depends. If you own a property and you receive your annual AOW valuation, and it has dropped by 20% from one year to the next, what would you do? By the way, this is not a hypothetical question, as we have seen this in the last decade. What would you do?

When we discuss this, most people would say that it is the market vagary, that the house still maintains its fundamental value and that next year it will probably increase in value again. Most people we speak with generally consider selling their property only if it has risen in value, not dropped.

This makes sense, and it is the same when it comes to managing an investment portfolio.

If you have a long-term goal, and the underlying holdings in your portfolio remain sound, perhaps holding your ground will be the most sensible solution.

That does not mean you do nothing. As many of our clients will have experienced, when we move through economic cycles and events like this happen, portfolios are adjusted tactically to reflect the changing environment. We continue to do this where appropriate, making smart but not reactive recommendations and decisions.

If you need access to your funds in the short term, you should probably not be exposed to more volatile assets, and if you are, it might be wise to consider a gradual risk reduction path. But it depends on your situation, so get professional advice.

If you have questions about how the current world events might affect you, your investments and your plans, speak with Black Swan Capital. Contact them at info@blackswancapital.eu, and they can talk through your situation and provide the guidance and support that keeps you informed and on track. 

Contact Black Swan Capital today
By David Bellingham