Will Trump’s tariffs crash the stock market – and should you be worried?

The president has imposed tariffs on China, Canada and Mexico. How will the markets react?
On Saturday, US president Donald Trump signed an executive order introducing 25% tariffs on goods from key trading partners Canada and Mexico, as well as 10% tariffs on Chinese goods.
Trump himself suggested Americans may experience economic "pain" off the back of the tariffs, which are likely to increase inflation and slow economic growth.
Investors are now holding their collective breath to see how the US stock market will react to the news when it opens on Monday.
It was this time only last week that the US market was reeling from the shock release of the DeepSeek AI chatbot, which saw US$1 trillion wiped off the value of US stocks.
But the markets bounced back, with the S&P 500 and Nasdaq-100 holding firm until news of Trump's tariffs on Friday saw the S&P 500 drop 0.50% and the Nasdaq Composite drop 0.28%.
Closer to home, the ASX 200 was down 1.6% on Monday.
What does this mean for me?
For local investors, there's likely to be further short-term volatility both on the ASX and global markets.
With Australian investors increasingly flocking to US stocks this year, it may be a bumpy few days as Wall Street processes Trump's latest move.
According to data from investing platform Sharesies, 69% of trading value on the platform was for US investments in January, up from an average 45%.
Like retail investors, Australian super funds are increasingly exposed to US stocks, meaning you may still feel some of the brunt of any volatility or market corrections even if you aren't investing directly.
Either way, it's worth remembering that it's important to take a longer-term approach to investing.
Zoom out even a couple of weeks and the picture looks a lot friendlier.
Both the Australian and US stock markets are near all-time highs and global inflation looks to be stabilising.
Of course, Trump's burgeoning trade war may yet throw a spanner in the works.
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