🧠 Trump’s Tariffs: Why They Matter If You’re Serious About a Finance Career

Hey 👋!

It’s fair to say, it’s been a minute. Hope you’re doing well on this lovely Saturday evening. See below for some commercial awareness info and implications re. Trumps recent move on tariffs.

For those of you serious about getting application ready ahead of application season and serious about breaking into banking and finance, I’d highly recommend you to check out Finance Fast Track. This year I’m looking to personally help at least 100 of you break in and secure offers for spring weeks, internships and grad-schemes.

The next 5 people to join and DM me their CV (after joining), I’ll personally provide feedback on how to improve your CV, and I’ll help you create a career action plan/roadmap for the next few months.

Trump recently pushed through a sweeping new set of tariffs, raising effective U.S. tariff rates to over 22%—the highest since 1910. On the surface, this might feel like just another political headline. But if you're serious about a career in investment banking, markets, asset management, or private equity, you need to go deeper.

Tariffs are not just about trade—they have knock-on effects across every part of the financial system. Understanding those effects is what will help you stand out in interviews, navigate conversations intelligently, and develop your commercial awareness.

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Here’s what you need to know—and why it matters.

1. Markets hate uncertainty. And tariffs bring a lot of it.

As soon as the tariff announcement dropped, the S&P 500 fell over 15% from its February peak. Why? Because investors immediately began pricing in slower global growth, supply chain disruption, and higher input costs for companies.

Tariffs essentially act like a tax on imports. That means goods become more expensive, inflation ticks up, and profit margins get squeezed. Companies with exposure to international trade (think: auto manufacturers, consumer electronics, industrials) are suddenly facing rising costs and softer demand.

From an investor’s perspective, that shifts everything—from how equities are valued, to which sectors are favoured, to how portfolios are rebalanced.

If you’re applying to asset management or S&T roles, this is the kind of macro shift you’ll be expected to interpret:

• How will inflation expectations change?
  Inflation expectations will likely rise due to higher import costs driven by tariffs.

• Will the Fed respond by raising rates?
  The Fed may keep rates higher for longer or consider additional hikes to contain inflation.

• How will bond yields react?
  Bond yields are expected to rise as investors price in higher inflation and potential Fed tightening.

• What does this mean for risk-on vs. risk-off asset allocation?
  Investors may rotate out of risk-on assets (like equities) into risk-off assets (like Treasuries or gold) to reduce exposure.

Markets run on confidence and expectations. Tariffs inject both cost and uncertainty into the system—which is why markets sold off.

2. M&A deal flow is slowing down—and bankers are feeling it.

The knock-on effect for dealmaking is immediate. Klarna, Chime, and other firms have delayed IPOs or investor presentations. Executives are hesitant to move forward with deals in a volatile market environment—especially when valuations are swinging wildly and financing costs are going up.

For investment banks, that means:

• Fewer mandates getting approved.

• Deals already in progress being pushed back or renegotiated.

• Lower fee income across advisory and capital markets teams.

If you're targeting an internship or graduate role in Investment Banking, you need to show an understanding of this:

Why do macroeconomic shocks affect M&A activity? How do tariffs affect deal confidence, buyer appetite, and access to financing?

Expect questions like “How would a 20% import tariff affect a cross-border acquisition?” or “Would you advise a client to delay a planned IPO in this environment?”

Short Answer:
Macroeconomic shocks like tariffs create uncertainty around costs, revenues, and growth, which lowers buyer confidence, complicates valuations, and tightens financing conditions—often leading to delayed or cancelled M&A and IPO plans.

3. Wealth managers and brokerages are getting hit hard.

Firms like Robinhood, Charles Schwab, and Morgan Stanley are all down significantly—because they make money when markets are up and clients are actively investing.

Their business model is mostly based on:

• Fees on assets under management (AUM)

• Commissions or trading volume (for some)

• Interest income on client cash balances

When markets fall:

• AUM shrinks → fee income drops

• Clients trade less → commission income falls

• Investors sit on cash → growth slows

If you’re applying to private banking or wealth management, you’ll need to understand how macro headwinds like this create commercial challenges:

• Clients might move to cash or bonds.

• Fee income becomes more volatile.

• Investor sentiment gets weaker.

You could be asked, “What would you say to a high-net-worth client concerned about the impact of tariffs on their portfolio?”

Short Answer:
I’d explain that tariffs may increase market volatility and inflation risk, so we’d review their portfolio’s sector and geographic exposure, diversify where needed, and consider reallocating to more defensive or inflation-protected assets.

4. Inflation risk is rising. The Fed may need to act.

Fed Chair Jerome Powell has already acknowledged the inflationary impact of the tariffs. The logic is straightforward: when import costs rise, prices go up. That forces central banks to respond—typically by holding interest rates higher for longer, or even hiking.

The impact across the economy is broad:

• Borrowing becomes more expensive for companies and individuals.

• Consumer spending slows down.

• Growth forecasts are revised downward.

• Equity valuations fall (especially for growth stocks, which are more sensitive to interest rates).

This becomes a key talking point in buy-side interviews—especially when discussing investment theses or macro views.

You should be comfortable answering:

• “How do tariffs feed through to inflation?”
  Tariffs raise import costs, which businesses often pass on to consumers, pushing prices up and driving inflation.

• “How does rising inflation affect the discount rate in a DCF?”
  Rising inflation leads to higher interest rates, increasing the discount rate and reducing the present value of future cash flows.

• “What sectors or asset classes benefit from this environment?”
  Defensive sectors (like utilities and healthcare) and inflation-protected assets (like TIPS, commodities, and gold) tend to perform better.

5. If you want to stand out—start thinking commercially.

This is what commercial awareness really looks like. Not just reading headlines, but connecting dots:

• From political decisions → to corporate earnings → to investment strategy.

• From economic policy → to investor psychology → to portfolio construction.

It’s one thing to know that Trump imposed tariffs.

It’s another to explain how those tariffs:

• Reduce M&A volumes

• Shift capital flows

• Influence central bank decisions

• Reprice risk across global markets

The best candidates can move between these layers with ease. That’s what will make you stand out in interviews and assessment centres.

Last but not least…

Whether you’re applying to banking, markets, asset management, or consulting, this is the kind of real-time macro event that’s worth paying attention to. It affects clients, firms, and investors in different ways—and being able to break that down confidently shows you understand the industry you're trying to join.

Start building that habit now.

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Ps. If you’re serious about breaking into the industry I’d love to personally help you inside Finance Fast Track. If you join today, DM me your CV and I’ll review it. Then we can work on a career roadmap/plan for your moving forward.

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