Advisors push back against tariff pessimism as trade war brews

President Trump’s tariff policies have triggered stock market volatility and growing fears of a recession, but some investment advisors see how America’s threat of global trade disruption can ultimately help boost the U.S. economy and clients’ wealth.

“There is a narrative I think right now that is a little bit too doom and gloom,” said William Connor, partner at the New Jersey-based RIA Sax Wealth Advisors. “There's absolutely a positive outcome that can come from all of this. The plan that we're trying to get to is about creating a sustainable U.S. economy that can grow to benefit everyone over the long term.” 

Stocks have rebounded since Trump announced a 90-day pause on tariffs for countries who have not retaliated against the new U.S. trade policies. However, in an escalating feud between the world’s two biggest economies, China now faces a 145% tariff on goods imported into the U.S. China then struck back by raising duties on imported U.S. goods to 125% from 84%.

“If you look at our trade agreements in place, like 85% of them favor the other country. I do think that it needed to be addressed in some way at some point,” said Nick Lalonde, founder of Third Act Wealth Management, an RIA in Dallas with $267 million AUM. “If you look at our [U.S.] trade deficit, it's about $1.2 trillion and there's two ways that you get out of debt as a country. You either spend less, which we're focused on right now, or you make more money.”

Another independent advisor under Commonwealth Financial Network, who spoke to InvestmentNews on the condition of anonymity, said he could foresee potential benefits of certain industries returning to U.S.-based manufacturing. “A lot of American pharmaceutical companies are based in Ireland just to get out of the taxes,” he said. “If they come up with things that bring them back, that would make sense to me, that would be a positive.” 

Paul Schatz, founder of the Connecticut-based RIA Heritage Capital, does not expect any trade war despite aggressive tariff moves from the U.S. and China. 

“I don't think that this whole tariff tantrum is going to fully come to fruition. I think that in the end, country by country and region by region will negotiate and acquiesce,” Schatz said. “Our economy can't move forward like this and we're the strongest. There's no other economy on earth that can withstand what's coming down the pike.”

Rather than a “poorly constructed fire-first, then aim” approach taken by President Trump on tariff maneuver, Schatz says the U.S. government should have instead petitioned the World Trade Organization to eliminate all global tariffs.

“Nobody wins a trade war. Everyone's a loser—it's just to the degree at which you lose,” Schatz said. “The U.S. being the world's reserve currency is in a unique position. We have to run massive trade deficits, and we flood the world with dollars and people buy our debt. If we didn't have this massive trade deficit, we would have all kinds of other and more major problems than just tariffs. So trade deficits come with the territory of being the world's reserve currency and being the world's biggest debtor.”