What Are Tariffs And How Do They Work?

The Tariff Landscape In 2026: What Has Changed?

How Tariffs Impact Corporate Earnings

Market Volatility And Investor Sentiment

How Different Sectors Are Impacted

Risks To Your Portfolio From Tariffs

How To Position Your Portfolio For A High-Tariff Environment

Frequently Asked Questions (FAQs)

Through 2025, tariffs created volatility, upsetting markets and leaving investors and trade partners questioning what would happen. The Supreme Court overturned many of the tariffs, the Trump administration announced new approaches to tariffs, and the VIX started edging above normal again. This article explains how to understand tariff effects and manage the potential implications to improve the strength of your portfolio.

What Are Tariffs And How Do They Work?

Tariffs are a form of taxation on imported goods meant to help control trade between countries and raise government revenue. They can vary greatly by product and the exporter’s country of origin. Importers pay a given percentage of the imported goods’ value to the federal government.

Tariffs can present a barrier to foreign products and materials by making them more expensive, in turn protecting domestic industries. They can also encourage trade through calibrated levels and international negotiations. When tariffs are greater than zero, they can increase the price of consumption or lower business profits, potentially leading to increased inflation and a slower economy.

The Tariff Landscape In 2026: What Has Changed?

To understand tariffs in 2026, you have to look at two periods: tariffs before and during 2025. For decades, the U.S. effective average tariff across product categories and countries of origin was low, from about 4% in 1990 to 1.5% up to 2023 except for a spike to 13.8% in 2019 during Donald Trump’s first administration and tariff hike. The average rate at the very beginning of 2025 was 2.6%, according to the Federal Reserve Bank of New York. The average for that year was between 16.4% and 17.4%. That was the highest rate since 1935.

Tariff rates for 2026 are now thoroughly up in the air. The Supreme Court ruled that for one class of tariffs, Trump lacked the authority to impose them. He then added an across-the-board 10% additional tariff, raising it to 15% the next day, using an argument that also might not pass legal scrutiny.

How Tariffs Impact Corporate Earnings

“Tariffs clearly drive the prices up for importers,” said Aoifinn Devitt, managing director of global wealth........

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