What just happened?

At the start of April, US President Trump announced new tariffs which have hit imports from nearly every country (excluding Canada and Mexico) with a 10% tax, with much steeper rates for 60 countries deemed by the United States to be the ‘worst trade offenders’. Chinese imports face tariffs totalling more than 104%, and the European Union, Japan, and South Korea have also been caught in the crossfire​.

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Tariffs: what they are, why they matter, and who really pays?

At their core, tariffs are just taxes on goods that come from overseas. Governments use them to make imported products more expensive. Why? Sometimes it’s to raise money, sometimes to protect local businesses, and sometimes to put political pressure on other countries. 

In practice, tariffs are paid by the importer when goods enter a country. 

The cost of that tariff doesn’t just disappear though. The importer then has three options:

1. Try to get a better deal from the supplier (which usually isn’t easy).
2. Swallow the cost (which cuts into their profits).
3. Pass the cost on to the customer, by raising prices.

Often option 3 wins out – meaning people can end up paying more at the checkout. In short: the prices of many goods imported to the US are likely to get a lot more expensive.

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Financial markets don’t like tariffs (or uncertainty)

The magnitude and breadth of tariffs, and the rapid pace of implementation, surprised investors and raised serious concerns about an escalating trade war and its impact on the global economy. While financial markets had been bracing for Trump’s trade-policy announcement, the severity of the plan still came as a shock. That has seen global stock markets decline notably in the past week, which has probably shown up in the performance of your investments. 

Unfortunately, it is now clear that the Trump administration is inclined to surprise, and policy can evolve rapidly and significantly. This makes for a volatile environment for investors. The key is to remain level-headed, maintain a well-diversified portfolio, and focus on the long term. 

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What this means for your money

If you’ve been putting money into one of Tempo’s advice mixes with a timeframe longer than a year, you’re likely exposed to a range of global assets: shares, bonds, and maybe even some property or infrastructure. The shares you hold are likely to also be spread across different regions. Different financial assets often respond in different ways to events such as these, but you’ve likely seen some of the side effects of Trump’s tariff announcements in your investments.

But here’s the good news: diversification is doing its job.

• When shares fall, quality bonds often rise, softening the blow.
• Different regions react differently—while US and European shares have dipped sharply, the New Zealand market has been relatively resilient, thanks to our domestic focus and more defensive companies​.
• Sector exposure matters—some industries (like tech or manufacturing) are more affected than others, but tech companies for example are where we saw some of the biggest gains in recent years. 

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What does this mean for you as an investor?

In uncertain times, it’s natural to worry about your investments. But a well-constructed, diversified portfolio is built for exactly this kind of turbulence. Here are a few reminders:

• Stay the course: Markets move up and down. Trying to time them rarely works. If you’ve got your time horizon and risk appetite in the right zones then the best thing to do is stick to your game plan. If you’re a regular investor then you’re also averaging in at lower prices when markets fall - which can help build your wealth in the long term.
  
  
• Investing involves risk: While unexpected changes in the value of your investments arising from market movements can test your risk tolerance, it’s important to stay focused on your investment goals and the time you have to achieve them.
  
  
• Your Tempo investments are valued daily: So you may see some ups and downs over short time periods arising from the volatility in markets. And importantly, you need to remember that the value you see in your Tempo app today, relates to market values two days ago.

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Keep in mind that your Tempo Advice Mix is built to reflect your risk appetite and timeframe. If you’re using our advice service, whether you’re Cautious, Balanced, or Adventurous, your advice mix is structured to match your goal and your comfort with risk.

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In summary

Yes, the global trade landscape is shifting—and fast. But if you’re invested in a diversified portfolio, you’re already in a stronger position than most. Your Tempo Advice Mix is designed to spread risk, cushion volatility, and keep you focused on long-term growth.

So, while Trump’s tariffs might rattle markets for now, your investment plans don’t need to be shaken.