From Nasdaq: 2025-04-03 13:00:00

President Trump implemented a two-step tariff strategy, starting with a baseline 10% tariff on imports from various countries on April 5. Additional duties on select nations will be imposed on April 9. The U.S. may see a weighted-average tariff rate of 29%, the highest in a century, with possible further increases if countries retaliate.

The new tariffs target both tariff and non-tariff barriers, including currency manipulation, value-added taxes, export subsidies, and agricultural restrictions. While some countries may easily adjust their policies, others, like the EU and India, face challenges in modifying their VAT system and repealing digital service taxes.

Tech companies like Apple and Alphabet may face challenges as China considers investigating Apple’s App Store fees and initiates an antitrust probe into Alphabet. China plays a crucial role in tech production, with the majority of U.S. smartphone and laptop imports coming from the country, potentially impacting tech ETFs like XLK and XLC.

Consumer stocks are at risk due to the new U.S. tariffs on Chinese products, impacting a wide range of consumer goods. Retailers may pass on higher costs to consumers, leading to increased inflation levels. ETFs like IYC and XRT may be affected by rising borrowing costs and inflation in the U.S. economy.

China’s export controls on rare earth elements crucial for clean energy transition may impact the supply chain. The REMX ETF, with significant exposure to China, may face challenges. The auto industry, heavily reliant on imports from China, could see a $14 billion hit to earnings, affecting ETFs like CARZ. Steel tariffs may benefit domestic industries but impact sectors like construction, affecting ETFs like SLX and PKB.

The beverage industry, including brands like Constellation Brands, may be affected by the tariffs, with potential cost pressures from steel duties. Aerospace companies like Boeing, Lockheed Martin, and Northrop Grumman may be pressured due to the reliance on steel and aluminum imports. ETFs like ITA focusing on aerospace and defense may feel the impact of the trade tensions.

Soybean exports, a key U.S. product for China, may be impacted by retaliatory tariffs. The SOYB ETF, with exposure to soybeans, could face challenges. Investors should monitor the evolving trade situation and its impact on various sectors and ETFs for potential investment opportunities or risks.



Read more at Nasdaq: Inside Trump Tariffs and Their Impact on Sector ETFs