Introduction

Regardless of where you stand politically, there’s no denying the uncertainty and anxiety caused by the economic and social policies being implemented by the current administration.

While we are not a political newsletter, we remain committed to our mission of equipping our readers with the knowledge needed to effectively navigate this environment.

As part of this commitment, we are launching a new series that will break down the key policies of this administration, analyze their potential impact on our communities, and provide proactive steps to mitigate any potential negative effects.

Key Takeaways: Financial Fortification Strategy 

• Boost Financial Resilience – Reduce vulnerability to economic downturns by cutting expenses, building an emergency fund, and paying off high-interest debt.

• Ensure Long-Term Stability – Proactively manage finances, diversify income, and stay informed to maintain financial security through changing economic conditions.

• Turn Crisis into Opportunity – A strong financial foundation lets you weather downturns and capitalize on opportunities when others are struggling.

• Investing wisely and staying informed helps avoid costly financial mistakes during market downturns.

• Economic downturns happen—those who prepare can survive and even thrive.

Trump’s Favorite Word: Tariffs and More Tariffs

What is a Tariff?

Tariffs are taxes imposed on goods imported into the country. Unfortunately for us, and contrary to President Trump’s campaign promise of making China pay for the tariffs, foreign entities do not pay tariffs. Tariffs are paid by the importing company to the U.S. government.

And in a profit-first capitalist system, the tariff cost is typically passed on to consumers through an increase of prices for goods and services.

Simply put, US consumers pay tariffs.

Consider this example:

Previously, a U.S. company purchasing an item manufactured in Mexico for $100 would sell it to consumers for $115.

$100 to the manufacturer, say $15 in profit(Capitalism must be fed), plus any applicable sales tax.

Now, with a 25% tariff in place, that same company must pay $100 for the item plus an additional $25 in taxes to Uncle Sam 🇺🇸. To maintain profitability, the company will likely adjust its pricing:

• Item cost: $100

• Tariff: $25

• Company profit: $15

• New selling price: $140 + sales tax

Although the specifics of the proposed tariffs remain unclear, the Trump administration has made it clear it is preparing to implement them on a large scale.

What Will Be the Impact?

The U.S. is the world’s largest importer, with approximately $3.5 trillion worth of goods entering the country annually. Applying tariffs across the board could cause a widespread price surge, significantly impacting everyday expenses.

Higher prices or Inflation, according to most economists, slows economic growth. 

Here’s what that could mean for the economy:

• Higher prices on goods and services lead to reduced consumer spending.

• Lower consumer spending slows economic growth and reduces private sector earnings.

• Companies facing declining sales may resort to mass layoffs, hiring freezes, and cost-cutting measures.

• A slowdown in consumer activity impacts tax revenue, further stressing government budgets.

With consumer spending driving 65-70% of the U.S. economy, any major disruption (like the ones currently being considered by this administration)  can have serious ripple effects. 

As anyone currently in the job market can tell you, companies are already adjusting their business strategies and downsizing their workforce in response to this uncertainty.

How to Minimize the Impact of Tariffs

Unfortunately, there is not some form one can fill out to become exempt from higher living costs, but there are steps you can take to strengthen your financial situation in preparation for potential adversity.

Staying calm, informed, and strategic is essential.

Now is the time to sit down, assess your financial health and determine how much financial pressure you can withstand. If the thought of missing a couple of paychecks makes you nervous, it’s time to take action.

We recommend implementing this Financial Fortification strategy:

1. Reassess Your Spending Habits

• Track your expenses and identify areas where you can cut back.

• Reduce discretionary spending—dining out, subscriptions, non-essential purchases.

• Adjust your budget to anticipate rising costs and live below your means.

2. Build an Emergency Fund

• Aim for three to six months’ worth of living expenses in a high-yield savings account.

• A solid emergency fund provides financial security and peace of mind.

• Achieving this step will bring a breathtaking sense of peace!

3. Pay Down High-Interest Debt

• Credit card companies and lenders DO NOT pause interest charges during downturns.

• Interest is like Thanos—inevitable once you’ve signed up, except you can't snap your finger and make it disappear.

• Avoid unnecessary debt and prioritize paying off high-interest balances.

• Remember: Debt has invincible shackles, if you can’t pay cash for it, you cannot afford it!

4. Stay Informed

• Seeing losses in your portfolio might tempt you to sell, but review all data before making any decisions.

• Retirement investment accounts are long-term investments, it’s generally unwise to cash out due to short-term market fluctuations.

• Remember, early withdrawals from 401(k)s, 403(b)s, and Roth IRAs often come with a 10% penalty.

• Avoid looking at them if you must!

• Markets tend to rebound—keep up with policy changes and seek to understand how they affect your financial situation.

5. Find Additional Sources of Income

• Don’t wait for tough times to seek extra income.

• The gig economy (Uber, Lyft, DoorDash, freelancing, content creation) offers flexible additional earning opportunities.

• Invest 10–20 hours a week in learning new skills that increase your earning potential.

6. Do Not Panic

"There is nothing new under the sun." Ecclesiastes 1:9

Economic downturns are a recurring part of capitalism. From the Oil Crisis of the 1970s to the Dot-Com Bubble, 9/11, the 2008 Great Recession, COVID-19, and now possibly Trumpflation—we’ve seen it all, and we’ll likely see more in our lifetime.

While recessions can be challenging, being prepared with the right strategies can significantly reduce their impact.

Financially literate and wealthy individuals accept this reality and take steps to not only weather economic downturns but also benefit from them.

These times are the reasons why we, at YBPN, emphasize the importance of preparation, strategic planning, and management of one’s Resources and Time (See Past Newsletters). By applying these principles, you’ll build a strong financial foundation. Over time, this foundation will evolve into a Financial Fortress—a financial situation that is shockproof because it is debt-free, built on strong, diversified investments, and backed by robust savings. It is capable of withstanding any economic storm.

Stay calm. Stay prepared. Most importantly—stay informed.

Thank You for Being Part of Our Community!

We want to take a moment to thank you for being a valued subscriber. We are dedicated to delivering the most relevant, insightful, and actionable information to help you succeed.

As we continue on this journey of empowerment, we ask that you share this newsletter with friends, family, or anyone who could benefit from the information. Together, we can fulfill our generational obligation to strengthen our peoples by building a community of successful individuals.

If you haven't already, please encourage others to subscribe so they can join us on this journey. 

Thank you for your continued trust and support. We look forward to being part of your journey and bringing you more valuable content in the future!

Sources

What are Tariffs- Richard Wolff:
https://youtu.be/NyYPlCOOX3M?si=ninABozczlVemYFb
Stocks surge to record highs as Trump returns to presidency:
https://www.reuters.com/markets/us/sp-500-futures-soar-record-high-after-trump-claims-victory-2024-11-06/
The Fair and Reciprocal Trade Plan:
https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-announces-fair-and-reciprocal-plan-on-trade/
Tariffs on China, Mexico and Canada:
https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-imposes-tariffs-on-imports-from-canada-mexico-and-china/
US Bank: Consumer Spending:
https://www.usbank.com/investing/financial-perspectives/market-news/consumer-spending.html#:~:text=Consumer%20spending%20is%20by%20far,size%20of%20the%20U.S.%20economy.
TrumpFlation:
https://www.investopedia.com/terms/t/trumpflation.asp
Oil Shock of 1973-74:
https://www.federalreservehistory.org/essays/oil-shock-of-1973-74
Dotcom Bubble:
https://corporatefinanceinstitute.com/resources/career-map/sell-side/capital-markets/dotcom-bubble/
USTR Trade Data:
https://ustr.gov/countries-regions#:~:text=The%20United%20States%20is%20the%20largest%20goods%20importer%20in%20the,percent%20of%20total%20goods%20imports.