Trump, Tariffs, and Trade Wars: An Investor’s Guide to Navigating Markets in 2025

It’s 2025, and the markets are once again reacting like a teenager who just got ghosted—moody, unpredictable, and prone to dramatic swings. With the return of Trumpian trade rhetoric, tariff threats resurfacing, and global supply chains once again in the geopolitical crosshairs, investors are feeling the heat. Somewhere, Ben Affleck is lighting a cigarette on a curb, perfectly embodying the collective mood of retail and institutional investors alike.

But here’s what the headlines won’t tell you: volatility isn’t a malfunction in the machine—it is the machine. It’s not a glitch. It’s a feature. And if you can learn to understand it, you can learn to work with it—and profit from it. Let’s break it down.

1. The Return of Tariffs and the Market’s Emotional Hangover

Trade tensions are back on the front page, and markets are doing what they do best when uncertainty rises—panicking in all directions. Just like in the late 2010s, the threat of tariffs on China, Mexico, or whoever’s next in line can send markets into a tailspin. Investors scramble, news anchors shout, and portfolios wobble.

But as Benjamin Graham reminds us in The Intelligent Investor, the market is not a rational oracle—it’s Mr. Market, your moody business partner who swings between euphoria and despair. His manic reactions present buying opportunities for those with clear heads and strong hands.

📘 Key principle: “In the short run, the market is a voting machine, but in the long run, it is a weighing machine.” – Benjamin Graham

2. Volatility: The Feature, Not the Flaw

Let’s get this out of the way: volatility doesn’t mean the system is broken. Volatility is the price of admission for being in the game. It’s the mechanism through which risk is rewarded—and punished.

If there were no volatility, there would be no opportunity.

Ed Thorp, legendary investor and author of A Man for All Markets, understood this deeply. His investing success came not from avoiding risk, but from managing it better than others. His edge? Probabilistic thinking, discipline, and patience.

When markets are turbulent, they’re also inefficient. Prices swing away from intrinsic value. That’s when opportunity knocks.

📘 Key principle: “Accept that risk is part of the process. Volatility is not a sign to flee—it’s a signal to think.” – Ed Thorp

3. Contrarian Thinking in a Herd-Driven Market

Let’s talk about the herd. In times of fear, the herd rushes to cash, high-yield savings accounts, and gold. They flee entire sectors. They sell tech because it's tied to China, or dump industrials because tariffs hit manufacturing. It’s a stampede of emotion.

This is when the contrarian steps in.

David Dreman’s Contrarian Investment Strategies showed that going against the crowd—especially in moments of extreme pessimism—often leads to outperformance. Why? Because fear leads to mispricing. The assets being dumped the hardest are often not the weakest—they’re just the most misunderstood.

📘 Key principle: “Buy when there’s blood in the streets—even if it’s your own.” – attributed to Baron Rothschild, embraced by contrarians

4. Defensive vs. Offensive Strategy: When to Hold, When to Hunt

So how should investors respond right now? Here’s where strategy trumps reaction.

The Defensive Playbook

• Stick to a disciplined dollar-cost averaging strategy.
• Diversify across global markets and asset classes.
• Keep some cash or short-term bonds on hand—liquidity buys both time and opportunity.
• Focus on low-cost index funds or blue-chip stocks with strong balance sheets.

The Offensive Playbook

• Look for mispriced companies—especially in tariff-affected sectors—that have durable competitive advantages.
• Dive into company fundamentals like you’re buying the whole business.
• Identify industries hurt by sentiment, not substance.

Buffett once said he’d happily invest as if he had only 20 lifetime decisions to make. That’s how you should treat your capital—selectively, intentionally, and with conviction.

📘 Key principle: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” – Warren Buffett

5. Think Like a Business Owner, Not a Gambler

The stock market is not a casino—unless you treat it like one. And too many investors fall into the trap of chasing trends, timing headlines, or reacting to every Fed whisper.

True investors—like Buffett, Graham, and Thorp—view themselves as business owners, not speculators. They invest with a margin of safety, a long-term horizon, and a clear rationale for every decision.

This mindset helps you stay steady in turbulent times. When others panic, you stick to your thesis. When others sell low, you buy value. You don’t need to predict the market. You just need to stay in it, wisely.

📘 Key principle: “The investor’s chief problem—and even his worst enemy—is likely to be himself.” – Benjamin Graham

Conclusion: Breathe, Don’t Flinch

The market in 2025 might look like chaos, but underneath the noise, the principles haven’t changed. Volatility isn’t the enemy—it’s your invitation to invest with intelligence, courage, and perspective.

And here’s something else to keep in mind: the policymakers and political power players stirring the tariff pot? They often have vested interests in the markets doing well, too. Whether through political pressure, economic goals, or personal portfolios, they’re not rooting for collapse. This means that while headlines might sound apocalyptic, the long game often bends toward stabilization—because no one wins in a broken market, not even the ones making the noise.

So when you see the Ben Affleck meme—the exhausted, cigarette-wielding symbol of every long-term investor—remember this: he’s not giving up. He’s just catching his breath.

And then he’s getting back to work.

So should you.

Kondwelani Kalinda - Associate Investment Advisor

^{This information has been prepared by Kondwelani Kalinda, an Associate Investment Advisor at iA Private Wealth Inc. Opinions expressed in this article are those of the Associate Investment Advisor only and do not necessarily reflect those of iA Private Wealth Inc. iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization}