Trump's economic policy is causing financial pressure for U.S. retirees: Experts recommend using savings cautiously

Taiwan • Business • 04/16 10:54
Trump's economic policy is causing financial pressure for U.S. retirees: Experts recommend using savings cautiously

The Trump administration's reignition of the tariff war and push for tax reform has put financial strain on American retirees. On April 2, 2025, Trump announced new tariffs, leading to a sharp decline in the U.S. stock market, impacting 401(k) and IRA accounts. The ongoing tax reform could potentially reduce social welfare benefits, affecting low- and middle-income groups. Confidence in U.S. assets among global retirement funds is shaken, leading to divestment actions that intensify economic pressure. Experts recommend a steady approach to market fluctuations, avoiding panic-driven actions, and adopting a diversified asset allocation strategy to balance risks and returns.

Key Updates

04/16 14:51

China Import and Export Fair Opens: Chinese Exporters Seek New Markets Amid Pressure from 145% US Tariffs

On April 15, 2025, the 137th Canton Fair opened in Guangzhou, facing the challenge of a 145% tariff imposed by the United States on Chinese products. Chinese exporters stated they are facing a survival crisis, with some companies halting shipments to the U.S., while others are shifting focus to Southeast Asian and European markets. Despite the bustling crowds at the exhibition, the tariff pressure has already altered the strategies of foreign trade companies. Local governments and trade platforms are offering support, and some companies are contemplating relocating production lines to Southeast Asia, but they are encountering new tariff challenges.

04/16 14:20

Singapore establishes an economic resilience task force to address the US-China tariff war; the President dissolves Parliament to initiate May elections; policies at the Hainan Free Trade Port aim to reduce business costs.

In April 2025, Singapore established the "Economic Resilience Taskforce" led by Deputy Prime Minister Lawrence Wong to tackle the effects of the US-China trade war. Meanwhile, Singapore's President Tharman dissolved Parliament on April 15, announcing a general election to be held on May 3. This is the first time Prime Minister Lawrence Wong is leading the People's Action Party in an election. Meanwhile, China's Hainan Free Trade Port is reducing corporate costs through tax incentives to attract businesses by focusing on changes in international trade.

04/16 12:50

US Tech Stocks Hit by Sell-off: NVIDIA, Apple, Tesla shares plummet

In April of 2025, the U.S. tech stock market experienced significant turmoil due to new U.S. restrictions on chip exports to China, high tariffs imposed by the Trump administration, and fears of an economic recession. Investor confidence was shaken, resulting in a massive outflow of funds. The stock prices of tech giants like NVIDIA, Apple, and Tesla plummeted, which dragged down the overall market. U.S. equity funds experienced a $6 billion outflow in a single month as funds shifted towards safe-haven assets such as gold. This event set off a chain reaction in global stock markets, causing simultaneous declines in Asian and European markets, and the three major U.S. indices suffered significant losses.

04/16 11:21

To avoid U.S. tariffs, Apple plans to air freight $2 billion worth of iPhones from India to the U.S. in March 2025, setting a new record for a single month.

In March of 2025, Apple Inc. airlifted nearly $2 billion worth of iPhones from India to the United States in response to the high tariff policy soon to be implemented by President Trump of the United States, setting a new monthly export record. Foxconn and Tata Electronics led this operation, using at least six cargo planes to transport about 600 tons, equivalent to 1.5 million iPhones, from Chennai Airport in India to multiple cities across the United States. This action highlights the flexibility of Apple's supply chain and underscores India's crucial role in its manufacturing network.

04/16 10:54

U.S. AI Chip Export Restrictions Cause Turmoil in Asian Markets: Korean Stocks Plummet, Nikkei Drops, Gold ETFs Hit Record Highs

The U.S. government has imposed export controls on AI chips like Nvidia H20 to China, causing fluctuations in the Asian market. South Korea's KOSPI index fell by 1.21%, with stock prices of Samsung Electronics and SK Hynix dropping; Japanese semiconductor stocks plummeted, and the Nikkei 225 index fell by 347 points. The Japanese yen appreciated by 0.59% against the U.S. dollar, and gold ETFs reached their second-highest price ever due to increased demand for safe-haven assets. South Korea and the U.S. are set to begin trade tariff negotiations, with South Korea considering increasing imports from the U.S. and boosting production within the U.S. to reduce its trade surplus.

04/16 10:54

Trump's economic policy is causing financial pressure for U.S. retirees: Experts recommend using savings cautiously

The Trump administration's reignition of the tariff war and push for tax reform has put financial strain on American retirees. On April 2, 2025, Trump announced new tariffs, leading to a sharp decline in the U.S. stock market, impacting 401(k) and IRA accounts. The ongoing tax reform could potentially reduce social welfare benefits, affecting low- and middle-income groups. Confidence in U.S. assets among global retirement funds is shaken, leading to divestment actions that intensify economic pressure. Experts recommend a steady approach to market fluctuations, avoiding panic-driven actions, and adopting a diversified asset allocation strategy to balance risks and returns.

04/16 03:20

China's Suspension of Receiving Boeing Aircraft Has Limited Impact: Taiwan's Aerospace Supply Chain is Viewed Favorably

In April 2025, the Chinese government ordered domestic airlines to suspend receiving Boeing aircraft and stop purchasing aircraft parts from American companies as a countermeasure against the 145% tariff imposed by the United States. Since the Chinese market accounts for only 2.06% of Boeing's orders, the impact is limited. Taiwanese aerospace supply chain companies such as Evergreen Aviation, Asia Pacific Aerospace, and Fengda Technology are gaining favor due to the recovery in global demand, as their stock prices rise, indicating market confidence in their growth potential.

04/16 02:52

NVIDIA expects to recognize a $5.5 billion expense in 2025 due to U.S. restrictions on H20 chips exports to China.

U.S. chip giant Nvidia is expected to recognize a $5.5 billion charge in the first quarter of fiscal year 2025 due to new U.S. government restrictions on exporting its H20 AI chips to China. The H20 chip was originally a downgraded version to comply with previous regulations, but it is still considered by the U.S. as potentially usable in China's supercomputer construction. This policy change has severely hit Nvidia's revenue expectations in China and triggered market turbulence, leading to its stock price dropping over 6% after hours.

04/16 01:18

The new U.S. tariff policy could lead to annual losses of over $1 billion for chip equipment manufacturers, affecting companies such as Applied Materials.

The new tariff policy drafted by the U.S. government could cause domestic semiconductor equipment manufacturers to lose more than $1 billion annually, as estimated in closed-door meetings with industry leaders and officials. Applied Materials, Lam Research, and KLA each anticipate losses of approximately $350 million, while mid-sized companies such as Onto Innovation are also expected to incur costs in the tens of millions of dollars. The losses include order cancellations, supply chain adjustments, and compliance costs, indicating the significant impact of the tariff policy on the high-tech manufacturing sector.

04/16 00:49

US consumers are dealing with changes in tariffs and price pressures, leading them to rethink their shopping habits.

In spring 2025, American consumers are facing changes in shopping behavior due to changes in tariff policies, rising prices, and low consumer confidence. Tariffs increased to 27%, affecting fast fashion brands like Shein and Temu, causing consumers to turn to the second-hand market. Retailers, unable to offer discounts because of supply chain costs, are seeing consumers pursue rational luxury. After the pandemic, consumers have shifted from emotional spending to conscious consumption and with a focus on sustainability. Retailers need to improve communication and reorganize supply chains to address these challenges.

Tariff Policy and Market Turmoil: Direct Impact on Retirement Savings

On April 2, 2025, President Trump announced a new round of tariffs on goods from multiple countries, causing a significant drop in the US stock market. The S&P 500 index fell by 4.2%, and the Dow Jones Industrial Average dropped by 3.2% Salon. This market turmoil has had a direct impact on retirees who rely on 401(k) and IRA accounts. According to the Detroit Free Press, since the beginning of 2025, the S&P 500 has fallen nearly 19% from its peak, approaching bear market territory Freep.

This volatility has left many Americans nearing retirement feeling anxious. Financial advisor Adem Selita advises, "Do not make significant adjustments to your investment portfolio during market downturns. Instead, gradually withdraw funds and maximize tax savings." Salon

Tax Reform Continuation and Social Security: Potential Risks for Low- and Middle-Income Individuals

The Trump administration is pushing to extend most provisions of the 2017 Tax Cuts and Jobs Act (TCJA). According to an analysis by Alabama Appleseed, these tax reforms will benefit the wealthiest 1% the most, while the government may need to cut spending by up to $1.5 trillion to $4 trillion, potentially impacting social welfare programs such as Medicaid and SNAP Hi Appleseed.

This poses a potential threat to retirees who rely on social security and government assistance. According to the Epoch Times, many retirees depend on Supplemental Security Income (SSI), Medicaid, and food stamps (SNAP) to maintain a basic standard of living Epoch Times. If these program budgets are cut, it will further squeeze retirees' financial space.

Global Retirement Fund Divestment: Spreading Confidence Crisis

Trump's trade and foreign policies have also affected global retirement funds' confidence in US assets. Large retirement funds like the Canada Pension Plan Investment Board (CPPIB) and Denmark's Akademiker Pension have started reassessing or pausing their investments in the US private market and infrastructure CTEE. Reasons include concerns about the US government potentially revoking tax-exempt status for foreign retirement funds and Trump's hostile rhetoric towards Canada and Denmark.

These divestment actions could further push up US bond yields, increase government borrowing costs, and put pressure on the overall economy. According to the New York Times, EU officials have even begun implementing cybersecurity measures against the US, indicating a loss of trust in US law and institutions NYTimes.

Expert Advice: Respond Calmly, Avoid Actions Driven by Panic

In such an economic environment, experts generally advise retirees and those nearing retirement to avoid actions driven by panic. Creighton University finance professor Robert R. Johnson points out, "Many retirees are used to saving during their careers but don't know how to spend after retirement. Financial advisors can help them develop reasonable spending and investment strategies." Salon

Additionally, Selita suggests investors work with portfolio managers to review whether asset allocation aligns with risk tolerance and avoid changing long-term investment policy statements (IPS) during market fluctuations. He emphasizes, "The purpose of an IPS is to provide guidance during market turmoil and should not be altered due to short-term fluctuations."

Dividend Stocks and Asset Allocation: Alternative Coping Strategies

Some investors choose to increase their holdings of dividend stocks during market downturns to create a stable source of retirement income. According to Economic Times columnist L.K. Slo, if a company's fundamentals remain unchanged, there is no need to panic even if stock prices fall; investors should continue holding to receive dividends Etnet.

Meanwhile, Franklin Templeton Investments suggests adopting a diversified asset allocation strategy in the face of tariff and inflation pressures, including short- to medium-term high-quality bonds and high-dividend stocks, to balance risk and return UDN.

Mental Health and Financial Decisions: Overlooked Intersections

Beyond financial aspects, psychological stress poses a significant challenge for retirees. A Yale University study indicates that financial stress exacerbates anxiety, which in turn affects investment and consumption decisions. Neurobehavioral expert Michael Valdez states, "Panic amplifies feelings of helplessness and undermines rational thinking." Yahoo

Therefore, experts suggest retirees take simple actions (such as canceling subscriptions, opening high-interest savings accounts, and reducing non-essential expenses) to regain a sense of control over their finances and maintain mental health to make more rational financial decisions.

References

People Also Ask...

faq

How much impact do Trump's economic policies have on the financial stress on retirees? What strategies can they use to cope?

faq

How significant is the effect of Trump's tariffs on the US stock market? What should retirees do?

faq

What impact does Trump's economic policy have on the retired population in our community? What are some suggestions for dealing with this?