What Traders Should Really Know About the April 2025 Tariff Shock: Thu Apr 3, 2025

At 4PM ET on April 2, 2025, President Trump took to the Rose Garden and laid out what he framed as a “declaration of economic independence.” Headlines blared. Social media spun. Markets… well, they reacted.

But if you’ve been following your charts—not just your news feed—you might not have been caught off guard. I wasn’t. My reaction was pretty neutral, to be honest. A lot of the details had been speculated about since the campaign trail. I was more interested in the specifics: what the tariff levels would be, which industries were involved, and how soon they’d take effect.

What Was Announced (and Why It Matters)

Let’s break it down:

• 25% tariffs on all foreign-made automobiles, effective midnight after the announcement.
  
• A shift toward “reciprocal” tariffs
  
• A baseline 10% tariff on all imports.
  

The announcement wasn’t just policy—there was narrative. Words like “economic independence” and references to a “tariff-backed nation” (1789–1913) were meant to give further context to the policies being announced. 

Market Impact: What the Charts Say

Here’s the thing: the E-mini S&P 500 futures dropped hard following the announcement. But I had already forecasted this move a week ago using my Lost Cycle analysis techniques. My subscribers saw the potential for this drop on their charts days before the Rose Garden speech.

In fact, the current weakness hasn’t even matched the move down from the February 19th high. I expect more short-term softness, likely extending into mid-April, before any significant reversal.

Meanwhile, the bond market did what it often does during uncertainty—rallied. We saw bond futures surge and yields fall, with the 10-year hovering near the key 4% mark. It’s the classic “flight to safety.”

Sensitive Sectors: It's More Than Just Autos

Sure, the automotive industry is front and center. But if you're a stock trader, you’ve got to dig deeper.

Ask yourself:

• Where does the company behind the ticker I want to trade generate most of its revenue?
  
• How global is its supply chain?
  
• Where is its production actually located?
  

There’s no one-size-fits-all answer. You have to do your homework and then—like any smart trader—go back to the charts to time your move.

Reciprocal Tariffs: Strategic Move or Negotiation Tool?

The idea of reciprocal tariffs sounds fair on the surface. But whether they’re effective depends on the intent behind them. Are they meant to be permanent corrections to trade balances? Or are they just chips in a larger game of economic poker?

Right now, it’s too early to tell. So don’t try to outguess geopolitics. Instead, stay nimble and watch what the markets are actually doing.

What About the Fed?

Tariffs alone won’t dictate what the Fed does next. But they might influence the ingredients in the Fed’s decision-making stew.

Think GDP growth, inflation pace, income tax policy, and deregulation. These factors interact, and tariffs could certainly shift how the data looks. That said, it’s premature to say the Fed will pivot because of this one event. 

What Traders Are Overlooking

Here’s my take: don’t get caught up in whether tariffs are “good” or “bad.” Instead, zoom out. How do tariffs fit into the larger economic blueprint?

Ask:

• What do I trade? What asset classes? What individual tickets?
  
• How might my watchlist be affected by changing trade policy?
  

And above all: watch the bond market. Especially bond yields. They’re not a crystal ball for stocks, but they tend to move in close rhythm—and can offer subtle clues.

The Bottom Line

No matter what you trade or how you feel about tariffs, remember this:

The chart will tell you where the bulls and bears are lining up—and who’s winning.

Use price action to guide your decisions, from entry to exit. The April 2 announcement didn’t change my outlook. It just made the action a little more exciting.

Keep your ear to the news, yes. But stay anchored in your chart work. There’s a lot more to unfold this quarter—and all of 2025.

~Hima