Ken Fisher: Are More US-China Tariffs Ahead?
Ken Fisher analyzes the potential for renewed US-China tariff conflicts and their likely market impact. He argues that because markets and traders have already adapted to tariff volatility through workarounds and loopholes, any future tariff escalation would have significantly less market impact than the initial shock of Liberation Day in April 2025.
Summary
Ken Fisher opens by identifying a key under-the-radar risk for the year ahead: the possibility of renewed tariff hostility between the US and China, given President Trump's framing of China as America's primary economic rival. He questions whether a more aggressive tariff conflict could produce significant market or economic damage.
Fisher recounts the events of April 2nd, 2025 — dubbed 'Liberation Day' — when President Trump introduced sweeping reciprocal tariffs across a wide range of countries. The breadth and scale of these tariffs shocked nearly everyone, and markets dropped sharply in immediate response.
However, Fisher explains that markets quickly recalibrated, concluding that the initial fear was overblown. Traders and businesses recognized numerous workarounds — legal avenues to avoid or reduce tariff exposure, such as routing imports through Mexico or Canada. This adaptive behavior, Fisher argues, proved effective and became a well-understood playbook.
Fisher's core conclusion is that if a reignited US-China tariff war were to occur, it would carry far less market impact than the Liberation Day shock did. Because the mechanisms for navigating tariffs are now well-established and global trade has continued to grow, markets would treat renewed tariff escalation more like the calmer, resilient conditions seen in the latter part of 2025 — which he characterizes as a pretty good year for most investors.
Key Insights
- Fisher argues that Trump's 'Liberation Day' tariffs on April 2, 2025 were a shock to nearly everyone due to their size and global spread, causing markets to drop sharply and quickly.
- Fisher claims markets rapidly concluded the initial tariff fear was overblown, anticipating that many tariffs would be readjusted and that traders would find legal ways around them.
- Fisher identifies routing imports through Mexico or Canada as a primary legal mechanism that allowed businesses to largely avoid the tariffs during the 2025 conflict.
- Fisher argues that because the tariff-avoidance playbook was proven effective in 2025 and global trade continued to grow, any reignited US-China tariff war would have significantly less market impact than the original Liberation Day shock.
- Fisher characterizes the back half of 2025 — after markets adapted to tariff volatility — as 'actually a pretty good year for most everybody,' suggesting resilience becomes the baseline once adaptation occurs.
Topics
Transcript
[0:00] Another under the surface bubbling feature is what ends up happening in the year ahead with tariffs and particularly in the continued hostility that the president expresses toward China as America's major economic rival in the world. Will he re-engage in a more hostile uh conflict on tariffs with China? And will that have big market impact, big economic impact? When President [0:31] Trump on uh so-called liberation day, April 2nd, 2025, introduced his so-called reciprocal tariffs. The size and the spread across the entire world of them was a shocker to almost everyone. That caused the market to fall through the floor pretty quickly. The market came to the view that maybe the fear was overblown that a…
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