How Kevin O’Leary Invests During Tariff Uncertainty & What You Can Learn From It
Written by
Karen Doyle
Edited by
Amber Barkley
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Keeping up with tariffs has been a little bit like watching a tennis match — they were going from one side to another almost daily. However, here are a few key takeaways from what the current tariffs look like in the United States:
- The Trump administration has implemented a 10% baseline tariff on all imported goods, though some countries face much higher levies as part of a reciprocal tariff trade policy. For example, tariffs on Chinese goods are particularly high, with a combination of pre-existing duties and new tariffs bringing the total to 55% for many products, according to The White House.
- Steel and aluminum that are imported have a 25% tariff.
- Automobiles have a 25% tariff, which is on both imported cars and auto parts alike.
It can be challenging for an investor to keep up with the stock market volatility at the best of times, but right now, effective tariff rates make it all the more difficult. During economic volatility like this, it can pay to listen to an experienced investor, like “Shark Tank” star Kevin O’Leary, and follow his lead.
Here’s how O’Leary invests during the tariff turbulence, and why you could consider doing the same.
O’Leary’s Take on Recession
One of the biggest risks of the tariffs the Trump administration has proposed is that they will raise prices, which could lead to a recession. Federal Reserve Board of Governors Chairman Jerome Powell recently said that while the Fed does not predict recessions, there is typically a one-in-four chance of recessions within 12 months at any given time.
O’Leary gave his insight on the likelihood of a recession in a recent interview with CNN’s John Berman. “Let me just say that we’ve been talking about recession now for four years in a row, you may recall. Forecasters of recessions have been wrong for four years straight. … We’re not in a recession right now.”
O’Leary added that he is not currently investing as he would in a recession, since there is no recession at the moment.
Markets Correct ‘All The Time’
O’Leary explained that, while tariffs make for “a difficult, tricky situation,” market corrections are commonplace.
“The markets correct 20% all the time, almost every 18 months. … This is nothing new for the S&P 500,” he said, adding that these corrections are often buying opportunities. “It’s a value deal.”
Professional investors commonly recommend “buying the dip,” or investing during a downturn, as there are bargains to be had when stock prices fall.
Expect Continued Volatility as Tariff Negotiations Play Out
The volatility in the markets is a byproduct of the administration’s tariff policies, according to O’Leary.
“There’s a lot of volatility and that’s what you get when you take these kinds of actions,” he said. “No administration has ever taken on 60 trade negotiations simultaneously, let alone China on top of that.”
Investing for the Long Term
O’Leary is well known for his long-term approach to investing, and nothing in his comments about tariffs or recession would indicate he’s deviating from that.
In his book, “Cold Hard Truth on Men, Women, and Money,” he recommends the individual investor pare down spending to invest as much as possible into a 401(k) or other retirement account.
By looking at your income and expenses over a 90-day pause period, you can see how much money you have to invest. If you want to invest more, you need to trim back your expenses.
O’Leary recommends sticking to this approach and not worrying about a possible future recession. “I would argue right now that people who count out the American economy are constantly wrong all the time.”
Caitlyn Moorhead contributed to the reporting for this article.
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