How will Trump tariffs affect retirement and 401Ks?

Donald Trump has said his reciprocal tariff policy was meant to stand up for the American worker, whom he portrayed as the victim of a decades-long shift toward unfettered globalization. His Rose Garden announcement on Wednesday pushed import duties to an average rate of around 22%, the highest in over a century.

But even if these policies improve the lots of workers (and I really doubt it), the efforts are already coming at the expense of American retirees.

First and foremost, that’s because Trump’s grand experiment is precipitating the swift collapse of the S&P 500 Index, the underpinning of tens of millions of retirement savings accounts. The S&P 500 is down around 11% since Wednesday and 17% since the February high as equity investors speculate that the policies will unleash chaos in global supply chains, hurt corporate profits, delay capital expenditures and drive up many consumer prices.

And while populists like Trump draw a false distinction between the fortunes of Wall Street and Main Street, it’s clear that many Americans are facing uncertainty and the prospect of financial duress from his policies.

Men and women ages 55 and over now hold about 79% of corporate equities and mutual funds among US households, according to Federal Reserve data. In aggregated Gallup survey data from 2019-2024, about half of non-retired Americans expected their 401(k) or other retirement savings accounts to serve as a major source of income when they stop working, and 29% of actual retirees said that it already is.