Investments: Tariffs Overturned
Two Fridays ago in a 6-3 decision, the Supreme Court upheld a ruling from the lower courts and struck down President Trump’s tariffs. The Court determined that the Trump administration could not use the International Emergency Economic Powers Act (IEEPA) to impose reciprocal and fentanyl-related tariffs. However, Section 232 of the Trade Expansion Act of 1962 remains in effect, allowing tariffs on imports such as steel, aluminum, semiconductors, and other goods to remain in tact due to national security concerns. Following this decision, President Trump invoked Section 122 of the Trade Act of 1974, implementing a blanket 10% tariff on certain foreign imports for 150 days. The 10% sweeping tariffs went into effect last Tuesday morning, and the administration said they would raise tariffs to the 15% cap on countries if necessary. As of now, an estimated $160-$180 billion in previously collected tariff revenue is expected to be refundable to companies through legal measures. For markets, the tariff ruling brings back heightened geopolitical uncertainty not seen since last April, and investors should expect continued volatility over the next couple of months. Economists have warned that while inflation from the tariffs has likely peaked, consumer prices are likely to remain elevated, at least for the time being, as businesses navigate ongoing uncertainty and seek to preserve profit margins.
Planning: Donor-Advised Fund?
Donor-Advised Funds, or DAFs, have become an increasingly valuable planning tool for those who are charitably inclined. A DAF allows you to contribute assets to the fund, receive an immediate tax deduction, and then give the funds to any church or charity of your choice, as long as it qualifies as a 501(c)(3). A major advantage of a DAF is being able to donate appreciated assets, such as stock, rather than giving with cash. By donating appreciated securities, you can avoid paying capital-gains taxes on the appreciation and receive a deduction for the full fair market value of the asset if held for over one year. Once in the DAF, funds also can be invested in the market and grow tax-free, increasing the amount available for future charitable giving. For those who desire to give generously and in a tax-efficient manner, Donor-Advised Funds offer a great way to integrate your charitable goals into your long-term financial plan.
