The Trump Tariffs, Market Reactions, and Lessons from Hong Kong By Bryce Ferguson

Over the past year, I’ve become increasingly active in the stock market. Like many beginning investors, I’ve learned that one of the best ways to anticipate market movement is to stay informed — constantly reading financial news and studying how markets have reacted in the past. I use artificial intelligence as a research tool to help identify historical patterns. While still a beginner, I find that AI gives me a quick foundation for understanding how major events might shape future market behavior.

Understanding the Impact of the Trump Tariffs before My Market Moves Lately, I’ve been focusing my research on the Trump-era tariffs as President Trump prepares to meet with China’s President Xi Jinping. The market will likely move before the meeting and again after, depending on the outcome. To prepare, I’ve used AI to analyze how similar situations have affected economic performance in the past when presidents meet to discuss such important topics that will have economic impact.

Since the tariffs were first implemented in 2018, estimates suggest they have raised between $400 billion and $600 billion in revenue for the U.S. government. Given that the national debt now exceeds $35 trillion, that extra revenue seems like a meaningful contribution. However, separating fact from politics is challenging. After reviewing multiple credible sources through AI tools, I found that the truth lies somewhere in the middle. The potential upsides of the tariffs include protecting American industries, generating government revenue, strengthening the U.S. position in trade negotiations, and encouraging companies to diversify their supply chains.

The downsides, however, are higher consumer prices, slower growth, risks of retaliation, and disruptions across global supply networks. Economists generally agree that tariffs can help certain industries in the short term but tend to weigh on the broader economy over time. One question that stood out to me was why President Biden and a Democrat-controlled Congress did not remove the tariffs if they were so harmful. For the first two years of Biden’s presidency, Democrats controlled both the House and Senate, and they have held the Senate throughout his term. Yet, most of Trump’s initial tariffs remain in place. That decision suggests that the tariffs serve not only economic purposes but also strategic and political ones, particularly in maintaining leverage with China. Even so, tariffs likely added to inflationary pressures, showing how difficult it can be to balance domestic goals with global realities. Lessons from Hong Kong’s Simple Tax System

Understanding buy-side and sell-side liquidity is central to reading these movements. Buy-side liquidity exists above highs where buy stops and breakout orders cluster. Sell-side liquidity exists below lows where stop losses from long positions accumulate. The market naturally moves between these zones because that is where the largest volume of resting orders exists. For institutional participants, these levels provide the liquidity necessary to enter or exit large positions without causing excessive slippage.

My father has spent 25 years working between Hong Kong and China, and his experience offers an interesting comparison. Hong Kong has a flat income tax capped at about 15%, no sales tax, and earns most of its revenue through duties on select imports. Essentially, citizens keep what they earn, and their contribution to government revenue depends on what they choose to buy. It’s a simple, transparent model that reflects individual choice — an appealing concept in today’s complex tax world.

My Simple Takeaway Ultimately, if Americans dislike tariffs, the simplest protest is to avoid buying goods from the countries affected. Like Hong Kong’s system, sometimes our spending habits determine our impact. The Trump tariffs remind us that every economic policy involves trade-offs. Understanding those trade-offs — rather than reacting politically — is the key to making smarter investment and policy decisions. However, when trying to decide on how the market will move after their meeting, I still need to do a little more AI research.