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Investors Split on How Foreign Trade Policy Change Might Affect Economy

This week’s Sentiment Survey special question asked AAII members how the possibility of a change in foreign trade policy is impacting their expectations of how stocks will perform. Responses were mixed. Just under two out five respondents (39%) expressed concerns about the new tariffs negatively affecting stocks and the economy. Slightly more than 25% of all respondents don’t expect any lasting impact on the economy or the stock market. Many of these respondents expressed skepticism about the tariffs actually being put or kept in place; others view any reaction to them as being short-lived. Just under 10% of all respondents say it is too early tell how the economy or the stock market will be affected. Another 10% of respondents are supportive of tariffs and believe they will have a positive impact on the economy.

Here is a sampling of the responses:

  • “If a trade war happens, and it is likely, it will drive down the economy.”
  • “I really don’t think there is anything here after the dust and noise settle.”
  • “In the long run, a positive impact on stocks.”
  • “No idea. The president keeps changing his mind.”
  • “I expect some stocks will benefit and some will not benefit. It remains to be seen what shakes out.”

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