Financial Forum: By John Scarborough already has) caused higher than expected inflation. There is also the fear of price gouging and companies taking advantage of the situation by raising prices on goods higher than the actual tariffs or adding “tariff increases” to goods that are not even affected by the tariffs to bolster their profits. For example, Kroger has testified that they took advantage of inflation rates in 2022 by raising the cost of food above the rate of inflation and engaging in deceptive tactics like shrinking food weight in dry goods. Sadly, this will probably start happening again. Just like the weather, tariffs and inflation are not something we have control over. Here is what I am recommending my clients do in 2025 to help weatherize themselves from tariffs and inflation as much as possible. Defensive dividend paying stocks – these stocks usually pay dividends even in periods of economic uncertainty. If their stock price increases, this, along with reinvested dividends, can offset or exceed inflation rates. TIPS or Treasury Inflation Protected Securities – these are useful because their yield mirrors that of the consumer price index. This is a great way to one-to-one inflation without taking a stock market risk. Here is an interesting idea – start growing some of your own food, if you can. Many of the food products we consume are grown, packaged, and then shipped to us from abroad. Having your own vegetable garden or fruit trees can end up being huge savings for your family. It’s also fun to see the plants grow! Another thing to consider doing is purchasing large quantities of wholesale dry goods (this is great even without tariff uncertainty). Think about it – you will always need soap, and it will never go bad, so why not lock in the price and buy a large amount of it on your next payday! There are always more great ways to plan, invest, and save more of your hard-earned money. Tariffs are here to stay (at least some of them) so making choices that help your financial bottom line through this difficult time can make a difference. If you feel like you need some help with your business or personal finances, feel free to email me (john@safeguardfinsvs.com) or call me at my office in Houston, Texas at (346) 763-3531 for a no obligation conversation today. n Recently, there has been a lot of discussion about a trade war with China. This trade war began by an excessive number of tariffs levied on Chinese products coming into the United States resulting in much speculation and economic uncertainty. In this article, we are going to cover what a tariff is, an example of it being deployed, tariffs in 2025, and how tariffs may hurt or help your financial bottom line. A tariff is an economic tool, a domestic tax on importers, used by governments for a variety of purposes. While it may seem as though the exporter country is getting hurt, in fact it is the end consumer who ultimately “feels” or “pays” the tariff. For example: a new tariff is introduced on plastic bowls made in China. When a domestic merchant (USA Furniture and More) wishes to buy plastic bowls from a Chinese factory (Chinese Bowls, Inc.), USA Furniture and More has to pay the IRS a tariff to get the bowls to their store shelves. If this tariff is unexpected and no alternative is viable, USA Furniture and More will be forced to raise the price of Chinese bowls to their customer to maintain their current profitability. Therefore, the tariff is fully carried by the purchaser of the Chinese bowl. More troubling still is the importing company, USA Furniture and More, might experience negative outcomes such as same store sales declines, lower bundled sales, and potentially accompanying layoffs due to demand shrinkage. Now that we have established what a tariff is and how it works, let’s take a practical look at tariffs today and the impact they might make in your situation. The Guardian, an independent news company, has done some fantastic coverage regarding the ongoing tariff situation. According to their latest research, at the time of this writing, the current tariffs are: 10% baseline on all imported goods – universal tariff; 25% on cars and auto parts – some exceptions apply to Mexico and Canada; 30% on all Chinese imports – with some exceptions; and 25% tariff on all Mexican and Canadian goods – no tariff on goods explicitly covered in USMCA. Since these percentile increases were sudden, they have already caused the ripple effect of inflation. For example, if an owner operator needs a replacement part for their truck, the replacement part is most likely manufactured abroad and then imported into the United States. If no exemption applies, at least a 10% increase in price for the product they are purchasing will be passed on to the owner operator. Of course, companies have the option of passing on the tariff fees to their customers or not, but there are not many companies out there that are willing (or able) to eat that kind of “loss” for long. You may be thinking, “Well, that’s just one part for one owner operator and I am all stocked up on whatever I need so it does not affect me.” You would not be wrong about that – you may have all the parts you need. However, there is something troubling here once you zoom out – if enough parts, widgets, and thing-a-ma-bobbers have an increased price, then on a macro level, the price of all goods will increase. This offloading of tariff expenses to maintain similar cash flows will (and 10-4 Magazine / June 2025 47 TARIFF TROUBLES
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