In the world of international politics and finance, strategy is everything. President Trump’s use of tariffs as a negotiation tactic offers a surprisingly insightful parallel to how financial advisors can help clients navigate the emotional rollercoaster of the stock market.
While the context differs- geopolitics versus personal finance- the underlying principle is the same: leverage emotion to gain control, but don’t let emotion dictate the outcome.
Trump’s Tariffs: Strategy Through Pressure
Trump’s approach to global trade, particularly with China, has been marked by bold, attention-grabbing tariffs. These weren’t just economic tools, they were psychological levers. By introducing uncertainty and financial pressure, Trump forced foreign governments to the negotiating table. Critics call it reckless, while supporters saw it as controlled chaos designed to extract better deals.
What’s crucial to understand is that these tariffs are rarely the end goal. They are a means to create discomfort, shift expectations, and even allow some nations an opportunity to grab more American business (like what is going on in Vietnam- potentially grabbing manufacturing work from China by eliminating their 90% tariffs on American goods). A great comparison can be made- buying stocks that have dropped dramatically in price create new opportunities for those who learn to manage their emotions.
The Stock Market’s Emotional Tariffs
Financial advisors face their own kind of pressure campaign every time the markets dip. Clients, driven by fear, uncertainty, and media noise, often want to “do something.” This is usually the worst thing at the worst time. Selling low. Timing the market. Abandoning the plan.
Here’s where the comparison shines: advisors must become negotiators of emotion.
Rather than responding with cold hard facts or immediate reassurance, the best advisors lean into the discomfort. They allow their clients to feel it, then strategically reframe the conversation. Label the pain instead of saying, “Don’t worry. This will pass.” Now here is where it gets interesting: Ask the client, “What would it mean for you if we acted on that fear today? And what would it cost you long-term?”
It’s about shifting focus from panic to an outside looking in perspective. From reaction to reason.
Managing Perception is Power
Both Trump and top-tier financial advisors understand that perception drives behavior. Whether it’s a trade war or a market correction, the key is controlling the story- without getting swept up in it.
For financial advisors, that means acknowledging the fear, labelling it, and then strategically navigating back to discipline. Just like a tariff isn’t about the product, market volatility isn’t about the numbers- it’s about the narrative.
Be calm, not chaotic
Trump’s tariff playbook is polarizing, but undeniably effective in shifting leverage. For financial advisors, the lesson is clear: don’t run from emotion, manage it. In moments of volatility, your role is less economist and more diplomat. Use the fear not to incite rash moves, but to reinforce strategic ones.
In the end, whether it’s a global deal or a retirement plan, winning the negotiation is about mastering the emotional game.
