Tariff fears hit consumer confidence, but capital-heavy industries should still thrive

Tariffs have created a storm in the US stock market and amongt other countries retaliating with their own tariffs on US goods. While most attention is focused on the immediate effects of tariffs, some experts are calling for greater shifts in consumer spending that could change industries at large. 

In a recent interview, Adam Basson, Founder of Flexchain Holdings, shared insights on how the current tariff policies are poised to not just reshape industries, but the very consumer behavior and spending habits that often underpin them. 

Uncertain clouds: Basson notes that uncertainty is causing consumers to adjust spending habits, even if they aren't directly feeling financial pressure yet. "There are going to be some people who, even if they're not impacted right now, they're just uncertain about the clouds that are hanging over their heads. They're going to make adjustments to their spending just to have some dry powder available," he explains.

As tariffs raise prices, Basson predicts shifts in discretionary spending. "To the extent people are feeling the pinch in terms of the tariffs, you're going to see a lot of those expenditures change," he says. "Whether it's getting a high-end gym membership rather than just a local gym or working out at home, going out to eat in restaurants three nights a week – things like that are going to cut back, we're going to see people cook more in the house."

Battle of neighbors: Regarding manufacturing, Basson highlights that current tariff structures seem to point to a lack of regional cooperation. "I thought the goal was to bring manufacturing back to North America. But the tariffs on Mexico and Canada have been pretty onerous. So at least right now the only incentivized move is going to the United States," he observes.

Basson questions whether this approach will evolve: "What I would definitely look out for is if eventually those barriers on Mexico and Canada and key allies come down, and then we're able to say, 'Okay, the goal is to bring near-shoring, friend-shoring, and reshoring broken out by industry.'"