After a few months reprieve from hearing the word tariff in the news on a minute-by-minute basis, the topic came back into focus this week

Back in February, the US Supreme Court struck down most of President Trump’s second term tariffs, leading many to believe the news of such policies would fade. Not so fast.

This week, US Trade Representative Jamison Greer noted that new tariffs would take effect soon in replacement of the temporary tariff Trump put in place after the Supreme Court ruling that expires this Friday. That temporary tariff (a 10% duty) was limited to 150 days – hence Friday’s deadline. Trump also announced a 50% tariff on certain Canadian imports, designed to put pressure on Canada to negotiate the US Mexico Canada Agreement.

Given the Supreme Court ruling (baring Trump from issuing tariffs under emergency law), the new tariffs will be imposed under a different law – the Trade Act of 1974. These new tariffs can be in place indefinitely but must be supported by investigations and analysis completed by the US Trade department. It’s expected the average tariff level will be similar to the level before the Supreme Court ruling (17% versus today’s 11% rate)

Why does this matter? The reintroduction of tariffs impacts the market in two main ways in my view. First, it reintroduces something the market does not like – uncertainty. Think back to April 2025 and the initial “tariff tantrum.” The issue was less the level of proposed tariffs (although that wasn’t exactly ideal”). It was mainly the unpredictability of how things would play out (remember all of the delays, threats of repeal, threats of acceleration, etc). It appears as though tariffs are once again being used as a negotiation tactic, making it very challenging for markets to price the end result. Uncertainty in outcomes are never a great set-up for markets. This may lead to volatility in the coming weeks/months. This can work to investors’ advantage but can also increase angst and concern – so brace yourself.

The second impact on markets in my view is a spark on a already smoldering fire called “concerns of an inflation bump.” Prices remain stubbornly high. This will come as no surprise to you if you have been to the grocery store, gas station, or airport in recent months. While last month’s inflation report showed a slow down in price increases, additional tariffs – along with the re-escalation of conflict in the Middle East impacting energy prices makes it highly likely that inflation will tick back up in the coming months. This directly impacts all our of lives as we purchase every day needs (and wants). However, it may also impact us at the investing level given the carry thru impact on interest rates. Recall – the Federal Reserve has a dual mandate – stable labor markets and steady prices. The latter is back in the spotlight and any spike in inflation will make it increasingly less likely the Fed can cut interest rates anytime soon.

This is not meant to discourage you in any way but rather to keep you informed on the latest hurdle facing markets and investors in the coming weeks and months. This too shall pass – and may very well present some interesting opportunities. Stay tuned!

Onward we go,