

President Donald Trump riffs on ‘old fashioned term’ groceries
After announcing global tariffs, President Donald Trump riffed on the word “groceries,” calling it an “old fashioned” and “beautiful term.”
- President Trump imposed new tariffs on imports, causing investors to worry about a recession.
- Arizona stocks are mixed, with some companies down sharply and others flat or slightly higher.
- Investors are advised not to panic and to consider adjusting their investment mix if they are concerned about volatility.
Stock markets in the U.S. and around the globe took a beating with the news that President Trump is following through on his pledge to impose worldwide tariffs on imported goods across the board.
Investors fear the move will raise consumer prices at a time when many Americans already are struggling financially. In addition, they expect these taxes will slow consumption and economic growth, possibly leading to a recession.
After the opening bell on Wall Street on April 3, the Dow fell sharply in early trading and did not rebound later in the day, mirroring global markets and adding to the jitters for many Americans.
Here’s a rundown of what’s happening and what you might do about your investments during this volatile time.
What happened to unnerve investors?
After the U.S. stock market closed April 2, Trump announced a series of tariff increases beyond the new 10% tariff that applies to virtually all imports.
Higher tariffs were announced on imports coming from China, Japan, South Korea, Taiwan and European Union countries including Germany and France, among other nations. Some of the larger rates were imposed on countries running outsized trade surpluses with the United States.
Trump already had announced higher tariffs on Canada and Mexico, two of the nation’s (and Arizona’s) top trading partners. “After much anticipation, the tariff band-aid was finally ripped off yesterday,” said Adam Turnquist, chief technical strategist at LPL Financial. As things now stand, he said, the weighted average U.S. tariff rate could rise from 2.3% in 2024 to nearly 20%.
Are these among the highest tariffs the U.S. has ever imposed?
Yes.
“The 20% estimate would rival the tariff-rate peak following the Smoot-Hawley Act of 1930,” Turnquist said. That was one of the causes of the Great Depression, though not the only cause of that cataclysmic economic downturn.
Did this come as a surprise?
Trump has been threatening higher tariffs for months, but some observers saw it mostly as a negotiating tactic. The April 2 announcement apparently caught a lot of people off guard.
“President Trump’s tariff announcement was more impactful than expected and viewed by many as the worst-case scenario,” said Mark Hackett, chief market strategist at Nationwide.
Anxiety will intensify if foreign nations retaliate with higher tariffs on items exported from the U.S., as many have vowed to do.
Are there potential positives about tariffs?
Yes. For starters, the policy is designed to reinvigorate U.S. manufacturing in many key industries. A prime example is the Taiwan Semiconductor Manufacturing Co. complex arising in north Phoenix — a massive $165 billion investment. While that commitment began in 2020, well before Trump was elected to his second term as president, the Taiwanese company recently announced a $100 billion expansion at a White House press conference attended by Trump and C.C. Wei, TSMC’s CEO.
And there could be other benefits. Tariffs are tax revenue that flows to the federal government.
“An optimistic scenario would be for new fiscal measures to be announced, potentially funded by the $600 (billion) to $700 (billion) in annual tariff revenue in the near-term,” said Seema Shah, chief global strategist for Principal Asset Management. “Uses for the tariff revenues could include helping to reduce the deficit, thereby driving down bond yields, or financing tax cuts.”
Corporate tax cuts could stimulate business activity, while individual tax cuts could provide support for lower-income households, she added.
How badly did stocks get hit?
The widely followed Dow Jones Industrial Average tumbled 1,679 points, almost 4%. That put the Dow off nearly 10% from its peak reached in December 2024.
Would that be the largest percentage decline ever?
No. Not even close. Investment researcher Morningstar identified 18 market declines of at least 20% over the past 150 years. The worst was a 79% drop during the early years of the Great Depression, followed by a 54% plunge during the early 2000s. But the stock market, typically defined as companies in the Standard & Poor’s 500 index, always has recovered and gone on to new highs, Morningstar noted.
Are Arizona stocks taking it on the chin, too?
Some are. Used-car retailer Carvana lost nearly 20% for the day, while copper miner Freeport-McMoRan was down more than 12%. Microchip Technology, with significant semiconductor operations in Asia, slumped nearly 17%.
But some other Arizona-based stocks were flat or slightly higher, including trash hauler Republic Services, now the state’s most valuable corporation, and Pinnacle West Capital, parent of electric utility Arizona Public Service.
Does this mean we are in a bear market or a recession?
No, or at least not yet. The Dow stood 10% below its peak reached in early December. Bear markets are defined as a drop of 20% or more. Still, investors and others should brace for lower economic growth, declining corporate earnings and higher inflation, said Turnquist.
“This is not a good combination for equity markets, which are wasting no time in repricing the added downside risk,” he said. Nor are we in a recession, though that could happen in coming months. Recessions are defined as “significant” declines in economic activity lasting more than a few months, as determined by economists at the National Bureau of Economic Research.
Notably, recessions aren’t “called” or identified until well after they have started, and sometimes after they have already ended.
I’ve got a 401(k), so I’m worried. What should I do?
The recent turmoil likely has spiked anxiety levels for many people with money tied up in workplace 401(k) plans or other retirement accounts. These are long-term accounts, for which short-term gyrations shouldn’t matter much.
Should you tinker with your holdings right now? Possibly but probably not. For starters, you don’t want to withdraw money from your account, as that would lock in any losses and possibly subject you to taxes. But you might want to adjust your investment mix if you feel the volatility is too much to handle.
Here are several articles that cover how you might handle the situation as a small investor:
Reach the writer at russ.wiles@arizonarepublic.com.