SAN DIEGO (KGTV) — Experts say stock markets are set up for volatility moving forward, as the trade war between the U.S. and China heats up.
On Friday morning, markets opened down; many major indexes such as the Dow, Nasdaq, and S&P 500 saw small losses.
Meanwhile, other measures like the market's Volatility Index rose slightly.
Officials from the Trump administration confirmed tariffs on Chinese imports are up to 145%, while China increased its own tariffs on U.S. imports to 125%.
With tariff policies changing by the day, uncertainty has been taking the stock market for a wild ride over the past few days.
That movement is causing investors to get nervous and sell off their stocks, wiping trillions of dollars from global stock markets in just weeks.
Stephen Conroy, an economics professor at the University of San Diego, said the economy suffers if tariffs cause higher prices and volatility, since people are too worried to go out and make the everyday purchases that keep the economy moving.
U.S. markets saw a historic jump earlier this week when President Trump rolled back many of the “Liberation Day” tariffs to 10% for most nations, portraying the move as a 90-day “pause.”
Then, a dip followed.
Conroy said the tariffs have not been paused, as the president suggests, but largely have been shifted to China.
This sets up consumers and businesses for massive costs if those import taxes stick around.
“The tariffs aren't off or on pause,” said Conroy. “In a way, they've just kind of simply moved to China. Both President Trump and President Xi Jinping from China are essentially playing a game of brinksmanship with each other.”
Conroy said tariffs aren’t the only problem for the stock market right now. He said cuts by the Department of Government Efficiency could make millions of federal workers stop spending out of fear for their job security, making it even harder for the economy to rebound.
So, what can you do?
With so much in the air, Conroy recommends taking a step back and making careful moves. He advises against panic buying or selling, saying you should evaluate your individual financial situation carefully.
Also, now may be a good time to buy certain products.
“If you expect there to be a big spike in tariffs on a product you’re going to buy, you may want to buy it today,” said Conroy. “But because of the volatility right now, it’s difficult to predict whether those tariffs will be in place a week from now, a month from now.”
