Recent Posts

Investors Focus on Fundamentals, Not Tariffs

Key Takeaways:

  • The Trump administration has imposed its latest round of trade tariffs against China and threatens that more is to come. The U.S. is seeking trade agreements that are ‘fair’ to the United States.

  • German leader Angela Merkel agrees, in principal, with a U.S. plan to eliminate all auto tariffs between the two nations, but believes such a deal must apply to all EU trading partners.

  • Despite escalating trade threats, economic readings continue to improve, easing investor concerns about the economic impact of outright trade wars.

Effective last Friday morning, July 6, the U.S. started imposing 25% import tariffs on $34 billion worth of Chinese goods. The $34 billion is the first part of new duties on a total of $50 billion that President Trump announced in June. The second part, additional tariffs on $16 billion in Chinese imports, is expected to take effect in two weeks. China promised to react in kind. Simultaneous with the new U.S. duties, Beijing implemented retaliatory tariffs on 545 U.S. exported goods also worth $34 billion, primarily targeting American agricultural products - soybeans in particular. Soybeans are the largest U.S. export to China, followed by civilian aircraft and motor vehicles.

Turning to the European Union (EU), President Trump is considering tariffs of 20% -to 25% on European automotive-related products, citing national-security concerns. Presently, the U.S. charges 2.5% duties on passenger cars and 25% on light trucks, whereas the EU imposes 10% tariffs on each. Recently, the Trump administration has offered an olive branch to Germany, which dominates the European auto market, whereby the U.S. would agree to entirely eliminate its tariffs on auto industry goods if Germany does the same.

After receiving a positive response from the CEOs of German automakers for this “zero-for-zero” tariffs plan, German Chancellor Angel Merkel voiced her support for the plan. However, any deal would be months away as Merkel said Germany couldn’t act independent of the EU. Therefore, such a plan needs agreement on an EU-wide level, that requires equal treatment with all of its trading partners, according to World Trade Organization rules. Even so, the pathway for true free trade has not only encouraged investors in the automotive sector, it has bolstered sentiment as a possible model across all sectors and regions.

Despite the implementation of new tariffs, U.S. equity markets ignored these developments and moved significantly higher. Investors focused on positive economic fundamentals, such as the release of the June employment report. That report stated the U.S. economy added 213,000 new jobs in June, topping economists’ consensus forecasts Upward revisions for April and May added a further 37,000 jobs. The unemployment rate did rise to 4.0% from 3.8%, but this was for a good reason, as 601,000 people returned to the workforce in June.

The jump in prime-age (25-54) labor force participation is near eight-year highs; female employment had the largest one-month advance since 1994. Moreover, wage gains unexpectedly slowed to 2.7% year-over-year from 2.8%, indicating the labor market is still absorbing spare capacity, boding well for continued low inflation.

With a backdrop of solidly favorable U.S. economic winds, we feel the current trade tensions should be viewed as skirmishes, with the White House willing to apply increasingly heavy pressure against China before a full out trade war ensues.


About Cetera® Investment Management

Cetera Investment Management LLC is an SEC registered investment adviser owned by Cetera Financial Group®. Cetera Investment Management provides market perspectives, portfolio guidance and other investment advice to its affiliated broker-dealers, dually registered broker-dealers and registered investment advisers.

About Cetera Financial Group®

Cetera Financial Group (“Cetera") is a leading network of independent firms empowering the delivery of professional financial advice to individuals, families and company retirement plans across the country through trusted financial advisors and financial institutions. Cetera is the second-largest independent financial advisor network in the nation by number of advisors, as well as a leading provider of retail services to the investment programs of banks and credit unions.

Through its multiple distinct firms, Cetera offers independent and institutions-based advisors the benefits of a large, established broker-dealer and registered investment adviser, while serving advisors and institutions in a way that is customized to their needs and aspirations. Advisor support resources offered through Cetera include award-winning wealth management and advisory platforms, comprehensive broker-dealer and registered investment adviser services, practice management support and innovative technology. For more information, visit

"Cetera Financial Group" refers to the network of independent retail firms encompassing, among others, Cetera Advisors, Cetera Advisor Networks, Cetera Investment Services (marketed as Cetera Financial Institutions), Cetera Financial Specialists, First Allied Securities, and Summit Brokerage Services. All firms are members FINRA/SIPC.


The material contained in this document was authored by and is the property of Cetera Investment Management LLC. Cetera Investment Management provides investment management and advisory services to a number of programs sponsored by affiliated and non-affiliated registered investment advisers. Your registered representative or investment adviser representative is not registered with Cetera Investment Management and did not take part in the creation of this material. He or she may not be able to offer Cetera Investment Management portfolio management services.

Nothing in this presentation should be construed as offering or disseminating specific investment, tax, or legal advice to any individual without the benefit of direct and specific consultation with an investment adviser representative authorized to offer Cetera Investment Management services. Information contained herein shall not constitute an offer or a solicitation of any services. Past performance is not a guarantee of future results.

For more information about Cetera Investment Management, please reference the Cetera Investment Management LLC Form ADV disclosure brochure and the disclosure brochure for the registered investment adviser your adviser is registered with. Please consult with your adviser for his or her specific firm registrations and programs available.

No independent analysis has been performed and the material should not be construed as investment advice. Investment decisions should not be based on this material since the information contained here is a singular update, and prudent investment decisions require the analysis of a much broader collection of facts and context. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The opinions expressed are as of the date published and may change without notice. Any forward-looking statements are based on assumptions, may not materialize, and are subject to revision.

All economic and performance information is historical and not indicative of future results. The market indices discussed are not actively managed. Investors cannot directly invest in unmanaged indices. Please consult your financial advisor for more information.

Additional risks are associated with international investing, such as currency fluctuations, political and economic instability, and differences in accounting standards.


The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ.

The S&P 500 is an index of 500 stocks chosen for market size, liquidity and industry grouping (among other factors) designed to be a leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large cap universe.

The NASDAQ Composite Index includes all domestic and international based common type stocks listed on The NASDAQ Stock Market. The NASDAQ Composite Index is a broad based index


301 N. Elm Street, Suite 301

Greensboro, NC 27401

P: 336-274-9403

F: 336-273-0217


3001 Academy Rd., Suite 110

Durham, NC 27707

P: 919-595-0619

  • LinkedIn - Grey Circle
  • Facebook - Grey Circle

Advisory services and securities offered through Cetera Advisor Networks LLC, member FINRA/SIPC,  a broker-dealer & Registered Investment Advisor.  Cetera is under separate ownership from any other named entity. 

Individuals affiliated with Cetera firms are either Registered Representatives who offer only brokerage services and receive transaction-based compensation (commissions), Investment Adviser Representatives who offer only investment advisory services and receive fees based on assets, or both Registered Representatives and Investment Adviser Representatives, who can offer both types of services.

This site is published for residents of the United States only. Registered Representatives of Cetera Advisor Networks LLC may only conduct business with residents of the states and/or jurisdictions in which they are properly registered. Not all of the products and services referenced on this site may be available in every state and through every advisor listed. For additional information please contact the advisor(s) listed on the site, visit the Cetera Advisor Networks LLC site at