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Tariff implications for investors: Building a resilient portfolio amid pullbacksVideo

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Video ADA Text: Tariff implications for investors: Building a resilient portfolio amid pullbacks video

Transcript Browser Title: Video transcript: Tariff implications for investors: Building a resilient portfolio amid pullbacks

Description: How long can the economy’s strength last? We examine the risks to our base case.

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Length (seconds): 118

Transcript: <p>[neutral background music]</p> <h2>On screen:</h2> <p>This video opens in an office with a textured wall, where a man in a navy suit and glasses stands behind a desk with a mug and laptop.</p> <h2>Logo:</h2> <p>A J.P. Morgan Wealth Management logo remains in an upper corner.</p> <h2>Note:</h2> <p>A disclaimer in a text box reads:</p> <h2>On screen:</h2> <p>INVESTMENT AND INSURANCE PRODUCTS:</p> <ul> <li><p><strong>NOT A DEPOSIT</strong></p> </li> <li><p><strong>NOT FDIC INSURED</strong></p> </li> <li><p><strong>NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY</strong></p> </li> <li><p><strong>NO BANK GUARANTEE</strong></p> </li> <li><p><strong>MAY LOSE VALUE</strong></p> </li> </ul> <h2>Federico Cuevas:</h2> <p>Here are your Top Market Takeaways.</p> <h2>On screen:</h2> <p>A teal circle with a title expands:</p> <h2>On screen:</h2> <p>Top</p> <p><strong>MARKET</strong></p> <p><strong>TAKEAWAYS</strong></p> <p><strong>MARCH 14, 2025</strong></p> <h2>On screen:</h2> <p>Identifying text appears beside the speaker:</p> <h2>On screen:</h2> <p><strong>Federico Cuevas</strong></p> <p>GLOBAL INVESTMENT STRATEGIST,</p> <p>J.P. MORGAN WEALTH MANAGEMENT</p> <h2>Federico Cuevas:</h2> <p>In the ever-evolving landscape of global trade, tariffs have once again taken center stage. With the U.S. implementing tariffs on China, Canada, and Mexico, and threatening more to come, it's crucial to understand who ultimately bears the cost.</p> <h2>On screen:</h2> <p>A question appears over gray:</p> <h2>On screen:</h2> <p>Who bears the cost of tariffs?</p> <h2>Federico Cuevas:</h2> <p>These tariffs target the largest trading partners in the U.S., accounting for over $1.3 trillion in imports, or about 42% of total U.S. imports in 2024.</p> <h2>On screen:</h2> <p>Highlighted text reads:</p> <h2>On screen:</h2> <p>Tariffs account for over $1.3 trillion in imports, or about 42% of total U.S. imports</p> <h2>Federico Cuevas:</h2> <p>In many cases, it's the businesses importing goods that initially absorb the higher costs. That said, these businesses might pass on the costs to their customers by raising prices, depending on the industry, the goods being sold, and the decisions made by the business.</p> <h2>On screen:</h2> <p>A question over gray reads:</p> <h2>On screen:</h2> <p>What are the impacts of tariffs?</p> <h2>Federico Cuevas:</h2> <p>A general rule of thumb is that for every 1% increase in the overall U.S. effective tariff rate, inflation could rise by about 0.1%.</p> <h2>On screen:</h2> <p>Beside him, an arrow points down from a 1% increase in</p> <h2>On screen:</h2> <p>overall U.S. effective tariff rate</p> <h2>On screen:</h2> <p>to</p> <h2>On screen:</h2> <p>inflation could rise by about 0.1%</p> <h2>On screen:</h2> <p>Then, a line graph appears with the heading:</p> <h2>On screen:</h2> <p>Tariff rates today, not seen since 1940's</p> <p>U.S. Effective Tariff Rate, %.</p> <h2>Federico Cuevas:</h2> <p>Although many other factors can influence the outcome, such as retaliation, supply chain reorganization, and shifts in demand driven by sentiment.</p> <h2>On screen:</h2> <p>The graph's vertical axis ranges from 0 to 25%, while the horizontal axis ranges from 1930 to 2020. The data line shows tariff rates in the '30s and early '40s between 15-20%, then a steady drop-off to around 5% by the '50s. Another drop-off occurs in the '80s, reducing the rate to between 0 and 5%. The rate remains there through the 2010s, increasing slightly just before 2020. Above the data line, an orange number reads: '27% Announced,' and a teal number reads: '11% Enacted.'</p> <h2>Note:</h2> <p>Small text below the graph reads:</p> <h2>On screen:</h2> <p>Note: Enacted includes 25% Canada (ex- 10% oil); 25% Mexico; 20% China. Announced includes: reciprocal tariff w/ VAT; 25% EU; 25% steel and aluminum; end of China de-minimis exemption; 25% EU Auto. Sources: Goldman Sachs; Census Bureau; Bloomberg Finance L.P. Data as of March 4, 2025.</p> <h2>On screen:</h2> <p>Highlighted text reads:</p> <h2>On screen:</h2> <p>Tariffs could potentially reduce growth by 50 to 100 basis points</p> <h2>Federico Cuevas:</h2> <p>We estimate that these tariffs could potentially reduce growth by approximately 50 to 100 basis points, depending on which tariffs are implemented and for how long.</p> <h2>On screen:</h2> <p>Then, a question appears over gray:</p> <h2>On screen:</h2> <p>What about market volatility, and other considerations?</p> <h2>Federico Cuevas:</h2> <p>The situation remains fluid, with potential delays or reconsiderations of the tariffs. Our base case anticipates higher import duties on China and select countries to secure critical supply chains. In this uncertain environment, volatility is expected to persist. So, it's important to emphasize portfolio diversification, considering assets like gold and core bonds, which can be resilient during this episode of the trade conflict.</p> <h2>On screen:</h2> <p>Icons appear beside him, with the heading:</p> <h2>On screen:</h2> <p>Portfolio Diversification</p> <h2>On screen:</h2> <p>Under three bars of 'GOLD' and a certificate representing 'CORE BONDS,' text reads:</p> <h2>On screen:</h2> <p>can be resilient during this episode of the trade conflict</p> <h2>On screen:</h2> <p>A list with three bullet points appears under a heading:</p> <h2>On screen:</h2> <p>Key Takeaways</p> <ul> <li>From businesses to consumers, the effects of tariffs are felt across the economy.</li> <li>As trade tensions continue, market fluctuations are likely. Diversifying investments can help mitigate risks.</li> <li>Understanding the broader economic context and potential policy shifts is crucial for making informed decisions.</li> </ul> <h2>Federico Cuevas:</h2> <p>To explore more, please visit CHASE.COM/THEKNOW</p> <h2>On screen:</h2> <p>A logo appears over gray:</p> <h2>Logo:</h2> <p>J.P. Morgan WEALTH MANAGEMENT.</p> <h2>On screen:</h2> <p>To explore more, visit CHASE.COM/THEKNOW</p> <h2>On screen:</h2> <p>An oval around the URL turns from white to blue.</p> <h2>Note:</h2> <p>Legal disclosures:</p> <h2>On screen:</h2> <p>All market and economic data are sourced from Bloomberg Finance L.P. and FactSet unless otherwise stated.</p> <p>The views, opinions, estimates and strategies expressed herein constitutes the speaker's judgment based on current market conditions and are subject to change without notice, and may differ from those expressed by other areas of J.P. Morgan. This information in no way constitutes J.P. Morgan Research and should not be treated as such. You should carefully consider your needs and objectives before making any decisions --including whether the services, products, asset classes (e.g. equities, fixed income, alternative investments, commodities, etc.) or strategies discussed are suitable to your needs. You must also consider the objectives, risks, charges, and expenses associated with any investment or financial service, product or strategy prior to making an investment decision. For additional guidance on how this information should be applied to your situation, you should consult your advisor.</p> <p>The <strong>S&amp;P 500 Index</strong> is an unmanaged broad-based index that is used as representation of the U.S. stock market. It includes 500 widely held common stocks. Total return figures reflect the reinvestment of dividends. &quot;S&amp;P500&quot; is a trademark of Standard and Poor's Corporation.</p> <p>Investing in securities involves market risk, including possible loss of principal, and there is no guarantee that investment objectives will be achieved. <strong>Outlooks and past performance is not a guarantee of future results.</strong></p> <p><strong>Past performance is no guarantee of future results.</strong> It is not possible to invest directly in an index.</p> <p>The price of equity securities may rise or fall due to the changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Equity securities are subject to &quot;stock market risk&quot; meaning that stock prices in general may decline over short or extended periods of time.</p> <p>Bonds are subject to interest rate risk, credit and default risk of the issuer. Bond prices generally fall when interest rates rise.</p> <p>Investments in commodities may have greater volatility than investments in traditional securities, particularly if the instruments involve leverage.</p> <p>Asset allocation/diversification does not guarantee a profit or protect against loss.</p> <p>J.P. Morgan Wealth Management is a business of JPMorgan Chase &amp; Co., which offers investment products and services through <strong>J.P. Morgan Securities LLC</strong> (JPMS), a registered broker-dealer and investment adviser, member FINRA and SIPC. Insurance products are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. Certain custody and other services are provided by JPMorgan Chase Bank, N.A. (JPMCB). JPMS, CIA and JPMCB are affiliated companies under the common control of JPMorgan Chase &amp; Co. 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