NAVIGATING THE FIRST 100 DAYS

UNCERTAINTY AND TARIFFS

As a new administration navigates its first 100 days in office, and its initial policies begin to unfold, certain terms frequently arise in political discussions: Uncertainty and Tariffs. Let’s break down what they mean and what could happen to businesses because of them.

Uncertainty in politics just means it’s hard to guess what the government will do next, who will be in charge, or if things in the government will stay stable.

When things are unclear like this, it can affect the economy. It might slow down how quickly we get the things we buy, people might be careful about spending their money, and businesses might not want to invest as much. It can also make the market feel unpredictable, and politicians might change their plans more often. Basically, when there’s a lot of political uncertainty, the economy can slow down a bit.

Right now, there’s a lot of talk about possibly increasing tariffs on goods coming from China. A tariff is like a tax that the government puts on products that are brought into the country from other places. This tax usually adds to the price of those imported goods, and you pay it when the goods arrive.

In California, Governor Newsom has initiated legal action against the Trump Administration concerning these tariffs. This action stems from the fact that California’s 12 major ports handle a substantial portion – approximately 40% – of all goods imported into the United States, making the state particularly sensitive to changes in tariff policy. The lawsuit is based on the “major questions doctrine,” a principle used by the Supreme Court to review interpretations of laws by government agencies, especially when those interpretations have significant economic or political ramifications.

The lawsuit is based on the idea that big decisions like setting tariffs should really be made by Congress, not just the President’s team, unless Congress gives them clear permission. Historically, Congress has been in charge of tariffs. This is different from what President Trump is suggesting with his idea for new tariffs around the world. News reports say we might know more about how these tariff talks are going in the next week or two. This ongoing uncertainty about trade and the economy can make the market feel nervous.

It’s important to remember that the economy naturally goes through ups and downs, including times when things slow down. These slowdowns can be tough and cause financial problems, but they also give us a chance to learn and get ready for the future. Understanding how these things work can help us prepare for what might be coming. Continue to stay connected as we keep a close eye on the market and keep you updated on how these developments unfold and potentially impact the business environment.