Why tariffs 'aren’t the problem' in the stock market: Veteran trader

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Markets are becoming rattled by the escalating commercialized talks arsenic President Trump expands connected the tariff policies from his archetypal term.

Stocks fell Monday, with the S&P 500 (^GSPC) logging its worst time of 2025, aft Trump reiterated that 25% tariffs connected goods from Mexico and Canada would spell guardant connected March 4. Trump besides vowed that the US would levy an further 10% tariff connected Chinese imports.

The shifting temper successful the marketplace echoed akin moves this twelvemonth pursuing tariff headlines. According to Wall Street seasoned Kenny Polcari, "Tariffs aren't the problem. Investor panic is."

"Every clip tariffs deed the headlines, the marketplace throws a fit, stocks dive, the media screams commercialized war, and investors enactment similar it's 2008 each implicit again," Polcari argued connected Yahoo Finance’s Trader Talk podcast (see video supra oregon perceive below). "But let's conscionable instrumentality a measurement back. Are tariffs truly the catastrophe that they're made retired to be?”

The large indexes person been down implicit the past period arsenic Trump floated respective caller tariff ideas, including reciprocal tariffs and caller duties connected alloy and aluminum, among different products. But though tariff concerns person been beforehand and center, investors person seen stocks rebound from crisp downturns.

Read more: What are tariffs, and however bash they impact you?

"The knee-jerk absorption was ridiculous," Polcari said of the sell-off successful aboriginal February erstwhile Trump announced tariffs connected Mexico and Canada. "Stocks tanked, volatility spiked, and algorithms panicked."

"But what happens erstwhile the particulate settles?" helium continued. "Executives adjust. Trade deals get renegotiated, and investors recognize that the satellite is not ending. Those who enactment calm and presumption themselves accordingly volition usually win."

President Trump has touted that tariffs beforehand home jobs, goods, and services and that the summation successful authorities gross would let the US to wage down the country’s nationalist indebtedness — which presently sits astatine $36.5 trillion.

However, forecasters enactment that the cost of tariffs often falls connected consumers, who wage higher prices for mundane goods imported from abroad.

Still, Polcari argued that investors’ inclination to set their investments successful anticipation of imaginable impacts from tariffs whitethorn beryllium hurting arsenic overmuch arsenic oregon much than the tariffs themselves.

“If you're dumping stocks due to the fact that of tariffs, you're doing it each wrong,” Polcari said.

Great Hill Capital president and managing subordinate Thomas Hayes agreed, saying that contempt the panic these tariffs person caused successful the abbreviated term, the effect volition apt beryllium neutral successful the agelong term.