From the Desk of Don Williams 

I woke up this morning (April 2^nd) a little late. I had been up reading into the late hours and took the luxury of sleeping in. As I opened my eyes and acclimated to the morning, the birds were chirping, my wife was stirring in the kitchen, and the trash truck was rumbling by doing its thing. A typical Wednesday morning except that I then remembered that it was ‘Liberation Day’. The Trump tariffs were set to go into effect today. Suddenly it felt like January 1, 2000, or as we affectionately remember it as Y2K. I looked at the clock to see if it was keeping time, made sure that the lights were still on, and listened to see if airplanes were falling out of the sky. Nope, a day like any other.

I showered, got dressed and got into the car on my way to work and tuned into CNBC. Equity futures were down sharply but were recovering as the morning progressed. Predictably, they had the tariff hysteria dialed up to 10.

As I listened, there was a very interesting interview with the ‘Squawk Box” crew and Ontario Premier Doug Ford. Here is the LINK to it, and I encourage you to take 10 minutes to watch. During the interview, Mr. Ford dismissively admitted that Canada already has tariffs and said they were willing to remove them, while at the same time, insisting that it’s Donald Trump who is escalating this ‘trade war’. The Squawk Box crew tried no less than three times to remind the Premier that it was Canada’s tariffs that initiated this, not the US. Andrew Ross Sorkin, no friend of Donald Trump, said in effect, “remove those, and the President will likely remove the ones imposed today.” This seemed to fall on deaf ears with Mr. Ford and I don’t think he realized how ridiculous he sounds in saying that it is the US who started this, not them! Beyond Canada and Mexico, the President released his Reciprocal Tariffs the following day.

I’ll do a more in-depth detail on the history of tariffs in the News You Can Use segment and let you decide. But America needs to regain its industrial base. During the early years of the twentieth century foreign goods shipped to the United States were slow and expensive to transport and thus were considered a “luxury”, affecting mostly the wealthy. Today, almost all the things that we buy on Amazon are made primarily in China and cheaply transported to the US. For far too many years, we have exported all our critical industrial manufacturing to Canada, Mexico, and China. In my humble opinion, if we learned anything from Covid, we cannot rely on foreign countries, be they friends or foes, to provide us with everyday critical supplies from manufacturing to healthcare.

The tariff war may be painful in the short term especially to the markets, but in the long term, they will help rebuild America’s industrial capacity. Again, this should be viewed as a good thing by both sides of the political aisle.

Don Williams 

The History of Tariffs:

From Ancient Trade to Modern Economics

Tariffs, taxes imposed on imported or exported goods, have played a pivotal role in shaping economies, trade, and international relations for millennia. Their history reflects the evolution of human commerce, from rudimentary barter systems to the complex global markets of today.

Ancient Origins

The concept of tariffs dates to ancient civilizations. In Mesopotamia, city-states levied duties on goods passing through their territories as early as 3000 BCE. These taxes were often collected in kind—grain, livestock, or precious metals—and served to enrich rulers while regulating trade. The Egyptians similarly imposed levies on goods transported along the Nile, and in ancient Greece, port cities like Athens charged duties on foreign merchants docking at Piraeus. Rome expanded this practice, using tariffs to fund its sprawling empire and protect local producers from foreign competition.

The Medieval Era: Protectionism Takes Root

During the Middle Ages, tariffs became tools of both revenue and control. European feudal lords and monarchs taxed goods moving across borders or through trade hubs, such as the Hanseatic League’s ports in Northern Europe. The rise of mercantilism in the 16th and 17th centuries marked a turning point. Nations like England and France used tariffs to hoard gold and silver by promoting exports and restricting imports. The English Navigation Acts of the 1650s, for instance, imposed heavy duties on foreign ships, bolstering domestic industries and naval power. Our very own country largely came into existence with The Tea Act of 1773, passed by the British Parliament, aimed to help the struggling East India Company by granting it a monopoly on tea sales in the American colonies, leading to the Boston Tea Party and escalating tensions towards the American Revolution. 

The American Experiment

Tariffs played a starring role in the early United States. The Tariff Act of 1789, one of the first laws passed by Congress, aimed to raise revenue for the fledgling government and shield American manufacturers from British competition. Throughout the 19th century, tariffs sparked fierce debate. Northern industrialists favored high tariffs to protect their factories, while Southern agrarians, reliant on exporting cotton and importing goods, pushed for free trade. This tension culminated in the Nullification Crisis of 1832-33, when South Carolina resisted federal tariff enforcement, foreshadowing Civil War divisions.

The Industrial Age and Global Trade

The 19th century saw tariffs peak as industrialization spread. Britain, the era’s economic powerhouse, briefly embraced free trade with the repeal of the Corn Laws in 1846, prioritizing cheap imports over domestic protection. Most other nations, however, doubled down on tariffs. The U.S. Smoot-Hawley Tariff Act of 1930, raising duties on over 20,000 goods, epitomized this trend—but it backfired, worsening the Great Depression by choking global trade.

The Modern Era: Tariffs in a Globalized World

After World War II, the pendulum swung toward free trade. The General Agreement on Tariffs and Trade (GATT), established in 1947 and later evolving into the World Trade Organization (WTO) in 1995, sought to reduce tariffs and promote economic cooperation. Average global tariff rates plummeted, fueling unprecedented trade growth. Yet, protectionism never vanished. The U.S.-China trade war beginning in 2018, with tariffs on billions in goods, showed how tariffs remain a weapon in geopolitical rivalries.

Tariffs Today

In 2025, tariffs continue to stir debate. Proponents argue they protect jobs and industries; critics say they raise costs and spark retaliation and ultimately inflation. From ancient tolls to modern trade wars, tariffs have proven a durable, if contentious, feature of human history—balancing economic self-interest with the demands of an interconnected world. Again, for the latest list of Reciprocal Tariffs click HERE.

Canadian Tariffs on U.S. Goods Prior to 2025:

A Precursor to Trade Tensions

Before the dramatic escalation of trade tensions in 2025, the tariff relationship between Canada and the United States was largely defined by cooperation and mutual benefit under the Canada-United States-Mexico Agreement (USMCA), which replaced NAFTA in July 2020 largely due to efforts by the first Trump Administration. For years, this agreement ensured that most goods crossing the border enjoyed duty-free status, fostering one of the world’s most integrated trade partnerships. However, beneath this harmonious surface, certain sectors faced significant tariffs, reflecting Canada’s efforts to protect domestic industries and navigate occasional trade disputes. This article explores the landscape of Canadian tariffs on U.S. goods prior to 2025, setting the stage for the retaliatory measures that would later unfold.

The Backbone of Duty-Free Trade: USMCA

USMCA was the cornerstone of U.S.-Canada trade relations in the early 2020s, eliminating tariffs on approximately 98% of goods traded between the two nations, provided they met strict rules of origin. This meant that products like machinery, electronics, vehicles, and most consumer goods flowed freely across the border, supporting a trade relationship valued at over $2 billion CAD daily. For U.S. exporters, compliance with USMCA’s origin requirements—ensuring goods were substantially produced in North America—unlocked this tariff-free access, keeping costs low and markets open.

Yet not all goods enjoyed this seamless exchange. Canada maintained a selective tariff regime to shield key industries, particularly in agriculture and natural resources, from U.S. competition. These exceptions, while limited in scope, were significant in their impact and foreshadowed the vulnerabilities that would later fuel broader trade conflicts.

Supply Management:

High Tariffs on Dairy, Poultry, and Eggs

One of the most prominent tariff barriers prior to 2025 was Canada’s supply management system, designed to stabilize domestic production of dairy, poultry, and eggs. Under this system, tariff-rate quotas (TRQs) allowed a small volume of U.S. imports to enter duty-free—negotiated concessions under USMCA—but imposed steep tariffs on anything exceeding those quotas. For example:

• Milk faced tariffs up to 270%.
• Cheese was subject to duties as high as 245%.
• Butter imports beyond the TRQ incurred tariffs up to 298%.
• Chicken and eggs faced rates of 238% and 163%, respectively.

These tariffs protected Canadian farmers from the scale and efficiency of U.S. agribusiness, ensuring stable prices and supply at home. For U.S. producers, the TRQs offered a narrow window of opportunity—such as 10 million dozen eggs annually—but the over-quota tariffs effectively capped their market penetration. This system, a fixture of Canadian policy for decades, remained a point of contention in trade talks, with the U.S. frequently pushing for greater access.

Echoes of 2018: Steel, Aluminum, and Retaliation 

A brief but telling episode of tariff escalation occurred in 2018, when the U.S. imposed tariffs on Canadian steel (25%) and aluminum (10%). Canada retaliated with surtaxes on U.S. goods, including 25% on steel and 10% on aluminum, alongside tariffs on consumer items like whiskey, yogurt, and playing cards. This tit-for-tat lasted until May 2019, when both sides lifted their measures, restoring duty-free trade under USMCA. While this conflict was resolved by 2020, it left a blueprint for retaliation—a strategy Canada would revisit in 2025.

The Bigger Picture 

Prior to 2025, the effective average tariff on U.S. goods entering Canada was near 0% for most categories, thanks to USMCA. The exceptions—supply-managed agriculture, softwood lumber, and occasional cultural goods were about 6% on average.

Setting the Stage for 2025

The pre-2025 tariff landscape was stable but not without tension. The high tariffs on dairy and poultry, the unresolved lumber dispute, and the memory of 2018’s retaliatory measures hinted at Canada’s willingness to defend its interests. When the U.S. imposed tariffs on Canadian goods in early 2025, triggering Canada’s 25% surtax on $30 billion CAD of U.S. imports starting March 4, it marked a shift from this earlier equilibrium. The pre-2025 era, with its mix of cooperation and selective barriers, now seems a quieter prelude to the trade storm that followed.

The Health of the US Economy in 2025:

A Resilient Start with Lingering Questions

The US economy stands at a fascinating crossroads. After years of navigating post-pandemic recovery, inflationary pressures, and geopolitical turbulence, the nation’s economic engine is humming with resilience—but not without its share of uncertainties. Drawing from the latest data and expert insights, here’s a look at the state of the US economy in early 2025, its key drivers, and the challenges that could shape its trajectory.

The US economy kicked off 2025 on solid footing. Gross Domestic Product (GDP) growth has remained steady, with estimates hovering around 2.5% annualized growth for Q1, according to projections from firms like Goldman Sachs and Deloitte. This pace reflects a balance of robust consumer spending, still the backbone of the economy—and a rebound in business investment. Retail sales data from January showed a 0.8% month-over-month increase, fueled by steady wage growth and a persistent willingness to spend despite higher interest rates in recent years.

The labor market remains a bright spot. The Bureau of Labor Statistics reported an unemployment rate of 4% in January 2025, with 143,000 jobs added numbers that signal stability rather than overheating. Sectors like technology, healthcare, and renewable energy continue to drive hiring, though manufacturing has seen slower gains amid trade policy shifts. Wage growth, averaging 3.5% year-over-year, has outpaced inflation, which cooled to 2.2% in February 2025, per the Consumer Price Index. This has given households some breathing room, bolstering confidence and spending power.

On the fiscal front, the federal budget deficit has crept up to an estimated 6.8% of GDP in 2025, reflecting increased spending on infrastructure and defense, alongside tax policy adjustments. This has been raising eyebrows among fiscal hawks, including myself.

Monetary policy, meanwhile, is in a delicate phase. The Federal Reserve, having paused rate hikes in late 2024, is now eyeing a potential easing cycle. The 10-year Treasury yield, a key barometer of market sentiment, sits at 4.44% in Q1 2025 but is projected to decline to 3.95% by 2029 as growth stabilizes and inflation remains tame. This gradual unwind suggests confidence in the economy’s ability to stand on its own, though Fed officials remain vigilant about external shocks—like energy price spikes or supply chain disruptions.

American consumers are proving their mettle. Household debt levels, while up slightly, remain manageable, with debt-to-income ratios far below pre-2008 crisis peaks. Savings rates have dipped to 4.1% of disposable income, a sign that people are spending rather than hoarding—a boon for retailers and service industries. E-commerce continues its upward march, with online sales accounting for 18% of total retail in Q1 2025.

Businesses, too, are adapting. Investment in capital goods—think machinery, software, and green tech—rose 3.2% in the last quarter of 2024, a trend carrying into 2025. However, uncertainty looms over trade policy. New tariffs introduced in late 2024 have sparked debate: they’ve bolstered some domestic industries (steel production is up 5% year-over-year) but raised costs for manufacturers reliant on imported components. The net effect on GDP growth remains a coin toss, with estimates ranging from a 0.1% drag to a modest boost, depending on how retaliatory measures play out globally.

For all its strengths, the US economy isn’t immune to headwinds. Immigration policy, a hot-button issue in 2025, could tighten labor supply if restrictive measures gain traction. The construction and agriculture sectors, already grappling with worker shortages, might feel the pinch most acutely. Meanwhile, geopolitical tensions—particularly in energy markets—threaten to nudge oil prices higher, which could reignite inflationary pressures.

Domestically, political gridlock over the debt ceiling and long-term spending priorities could rattle markets later in the year. And while consumer confidence is holding, any sudden shift in sentiment—say, from a stock market correction or unexpected Fed move—could dampen the spending spree that’s kept growth afloat.

As of April 2025, the US economy is a picture of resilience tempered by caution. It’s growing, not booming; stable, not stagnant. The labor market is healthy, inflation is in check, and both consumers and businesses are playing their parts. Yet the road ahead hinges on navigating policy uncertainties and external risks with finesse. If the US can maintain this balancing act, 2025 could solidify its reputation as a year of quiet, yet less flashy than the recovery highs of 2021, but more sustainable for the long haul. For now, the pulse of the economy beats steadily, with plenty of chapters still to be written.

Market Correction Territory:

Again

The market pullback that began on February 20^th twice double tested the down 10% level almost to the penny, briefly moving into the correction area. Following the tariff announcements it moved deeper into correction territory. As a reminder, a ‘correction’ is when the market is more than 10% below its recent highs, but less than 20%. I remain optimistic about an ultimate recovery for the year; however, we’re not out of the woods yet. I am maintaining my Market Condition MARCON Level 3 and continue to schedule reviews with clients as well as making outgoing phone calls to you. Our investment team remains vigilant at monitoring the market and making rebalancing moves as opportunities present themselves. If you have not heard from me and would like to schedule a review, I encourage you to click the link HERE and book an in-office or virtual meeting with me.

This month’s Prime Dining was afloat. In celebration of a friend and client’s birthday we booked a dining experience aboard Craft Tampa. Here is a description from their website:

Join us for Tampa’s most unique dining experience aboard Craft as we take you on a culinary and cocktail river journey through the heart of Tampa up the Hillsborough River.  Our Executive Chef has freshly prepared a delectable menu, in America’s first open kitchen using gas cooking equipment on a river cruiser. The 3-course dinner will dazzle your palate as you progress through the courses!

Craft features the Bow & Stern Bar, built from a 1914 wooden cruiser, where the Craft-ologist will prepare amazing cocktails to complement and celebrate your dining experience. All while our Captain navigates beneath many low bridges with just inches to spare on the Hillsborough River in the heart of Tampa.  Your senses will be overwhelmed, and the sites will make you race to snap photos from our observation platforms of Tampa’s most iconic views.

Dinner Journeys Include:

• Dinner prices start at $79.95 & $99.95 on Saturday evenings per person
• 2-hour Cruise with 45-minute* boarding prior to departure
• Unparalleled views of scenic waterways and passage beneath low bridges
• 3-Course Dinner & soda, coffee and tea

The weather was perfect, and the views, food, and conversation were fantastic. I highly recommend this experience if you are looking for a dining experience out of the ordinary.

 Don Williams

 CMFC®, CRPC®

Financial Advisor

View Don's Bio

Tyler Olson

Managing Director, Florida Operations

View Tyler's Bio

Ahmed Alasri

Office Administrator 

Sources:

CNBC Video

Reciprocal Tariffs

TIME

Fordham Journal

Wealth of Common Sense

Newsweek

PBS NEWS

The Conference Board

S&P Global

Market Correction