Trump's Tariffs Will Make Millionaires in 2025 (Here's How)

Millionaires are made when the stock market crashes, and the bigger the crash, the bigger the opportunity, especially if we can be greedy when others are fearful. That's the best way to get rich without getting lucky. So in this video, I'll cover everything you need to know about the market crashing and which stocks could win big as a result. Your time is valuable, so let's get right into it. First things first, I'm not here to hold you hostage, so here's everything I'm going to talk about. Why this latest round of tariffs caused such a big market crash, how far stocks could drop and for how long, exactly how to be greedy when others are being fearful, and of course, which stocks I'm buying as prices continue to tank. This is a once in a lifetime opportunity, so strap in and let's talk about this market crash. Stock markets around the world are crashing as President Trump's tariffs take effect. Both the S&P 500 and the Nasdaq saw their biggest drawdowns since the pandemic after reciprocal tariffs were announced for nearly every country on the planet. The reason that markets are crashing is these reciprocal tariff rates came in much higher than expected. For example, goods imported from China to the U.S. now have a 34% tariff on top of the existing 20%. Imports from the EU now have 20% tariffs and Southeast Asian countries like Vietnam and Cambodia got slapped with massive 46-49% tariffs. China and the EU accounted for about a quarter of all U.S. imports last year, and we also get a lot of things from Southeast Asia, like textiles, machinery, and electronic components. The big thing to understand is that these reciprocal tariffs are part of a much bigger economic plan. A plan that I personally think is going to backfire, which affects how I'm personally investing. Just to be clear, this isn't about personal politics, and I'm going to back up everything I say with numbers. Let's cover the plan first, and then talk about its potential impacts on the stock market. Trump's economic plan is heavily inspired by a paper called A User's Guide to Restructuring the Global Trading System by Stephen Moran, who's the current chair of the White House Council of Economic Advisors. I'm obviously not an expert on global economics, but I did sit down and read the whole paper to try and get a sense of the big picture. Moran's paper has three key parts, using tariffs as a negotiating tool, forcing fair trade through separate reciprocal tariffs, and ultimately restructuring the US's foreign debts. And we're already in part two of this plan. The first part is using tariffs as a tool to pressure other countries into renegotiating trade deals. Like I said in my previous videos, the 25% tariffs on Canada and Mexico were negotiating tactics to address US trade deficits and issues around immigration and border security. The big idea of this part of the plan is to create enough economic pain for other countries to force them to the negotiating table. Part two is leveling the economic playing field with reciprocal tariffs, which is what happened earlier this week. Reciprocal tariffs mean that if a country imposes 20% tariffs on US steel, we automatically impose 20% tariffs on their steel as well. So, it's kind of like mutually assured destruction, where the only logical conclusion is for everybody to start lowering tariffs and trade barriers, which ultimately levels the playing field for American manufacturers and workers. The third part of the plan is all about weakening the US dollar without risking its status as the world's reserve currency, which also helps make US exports cheaper and US labor more competitive. Now let's talk about why I think this plan is going to fail. Remember what I said earlier. Markets are currently crashing because reciprocal tariffs came in much higher than expected. But how can that be if they're just the same rates that those countries are already charging us? Well, it turns out that instead of actually being reciprocal, the tariff rates announced last week appear to follow a simple formula that has nothing to do with other countries' tariffs at all. They just take the US trade deficit with that country and divide it by that country's total exports to the US to get the number in the middle column of Trump's reciprocal tariffs table. Then, you just divide that number by 2 to get the discounted reciprocal tariff rates in column 3. For example, America's trade deficit with China was $295.4 billion and the US imported $439 billion worth of Chinese goods in 2024. 295.4 divided by 439 is 67.3% and dividing that number by 2 gives us the 34% reciprocal tariff rate. There's nothing in there about the specific tariffs on Chinese steel or cars or electronic components. It's simply the bigger the deficit, the bigger the tariff. Another big problem is inconsistencies from country to country. According to the formula I just showed you, the US would have to have around a 10% trade deficit with the UK to make this math work out. But we actually had a $12 billion trade surplus with them last year, which means the UK already buys more from the US than we do from them and the Trump administration is still charging them a 10% tariff. There are 115 countries on this list with that same 10% tariff and all 115 of them are countries that buy more from the US than they sell to us and all 115 of them just got hit with a 10% tariff anyway. And since nothing in this formula is actually a reciprocal tariff, there's no way for other countries to even calculate how to lower their tariffs in response. That's why these tariffs can't last, especially once huge US trade partners start imposing actually reciprocal tariffs based on the ones the US just announced. For example, just as I'm recording this, China announced 34% tariffs on all US goods and it wouldn't surprise me to see more countries follow suit. Remember, tariffs on US goods work the same way. They lead to lower demand, which lowers sales for US companies, which leads to lower stock prices. That's the big connection between tariffs and the stock market crash. And that's why it's so important to diversify your investments with assets that don't correlate to the stock market. The problem is that most alternative assets either have high minimums, like private equity, or they're high risk like cryptocurrencies. That's where the Fundrise flagship real estate fund, who's making this video possible, can help you. They give you access to invest in some of the best real estate strategies without breaking the bank. Real estate investments usually need a lot of upfront capital, but the Fundrise flagship fund gives everyday investors access to high-demand single-family rentals, affordable multi-family apartments, cutting-edge industrial warehouses, and commercial facilities, all in one portfolio designed for diversification and long-term earning potential, with an access point starting at $10. They also have an impressive track record, already managing over $7 billion of real estate across hundreds of high-value properties. So, if you want access to some of the best real estate across multiple investment strategies, check out the Fundrise flagship real estate fund with my link below today. Alright, that covers why I don't think these tariffs will last very long, which means all the pressure they're putting on stock prices will eventually go the other way. But how long could eventually be? And how far can stocks fall in the meantime? To answer that, let's look at some historic market data next. This is a chart from First Trust and Bloomberg, showing the S&P 500's performance during every bull and bear market going back to World War II. The x-axis is time, and the y-axis is total returns. It turns out that bull markets last an average of 4.3 years, while bear markets last 11 months, and the average return during a bull market is 150%. While bear markets lose roughly 32% on average. That means bull markets last 4.5 times longer than bear markets, and return 3 times more than bear markets drop. This is why millionaires get made during stock market crashes. They're really opportunities to buy the best stocks at the biggest discounts. That's also why I focus on long-term investing. It takes years for markets to hit the top and recover from their bottoms. And to understand that, let's look at another study that splits bear markets into two parts, their declines and their recoveries. In 1956, the S&P 500 went down 21% over 15 months, and then took another 11 months to recover from the bottom. Compare that to the start of the pandemic, where the market dropped 34% in just one month, and it also only took 5 months to recover. There's an important lesson in this study that I think will make millionaires as well. The average bear market takes around 13 months to bottom, and another 24 months to recover. And even the shortest bear market lasts months, not minutes. That means there's always plenty of time to plan, build cash, and prepare to be greedy when others are being fearful. That's how real money gets made in the stock market. But how do we actually know when to be fearful and when to be greedy? Let me show you that next. Before I even check my favorite stocks, I always check CNN's Fear and Greed Index, which is currently showing extreme fear. This is one of the lowest ratings I've ever seen for this index. And if we look at a one-year timeline, the market is the most fearful it's been in the last year, which is useful info for anyone who wants to be greedy when others are being fearful. The reason I check the Fear and Greed Index first is because it's an average of seven very useful market indicators, like stock price momentum, strength and breadth, the current ratio of puts to call options, and market volatility, as well as the relative demand between stocks and bonds. So I get a lot of high-level market information all on one page. Two of the metrics that I use the most are market momentum and volatility. Market momentum compares the S&P 500 to its 125-day moving average. They're around 250 trading days a year, so this is really the S&P's six-month moving average and the separation between the current price and its six-month average tells you roughly how much momentum the market has and in which direction. So right now, there's a lot of downward pressure on the market from these tariffs, so my plan is to keep building cash until that pressure starts to reverse. The price doesn't need to get back above the six-month moving average, but I try not to dollar-cost average in too heavy until I'm confident that I'm not working against the rest of the market, which means the price should be trending upwards. The VIX is the S&P 500's volatility index, which measures how much prices are expected to move up and down based on options contracts over the next 30 days, which means this is a forward-looking indicator. The VIX usually drops when the market is moving up and it skyrockets when stocks start to crash. That means its 50-day moving average tends to be lower in bull markets, higher in bear markets, and has huge spikes that signal extreme fear. So, when the VIX stabilizes after a big spike and market momentum starts trending toward or above its average, that's when I start buying more aggressively. Alright, so far, we've covered why tariffs cause stocks to crash, looked at how long crashes take to recover, and found a way to tell when the market is being greedy or fearful. Now, with all that context, we can talk about which stocks to buy as a result. And, if you feel I've earned it, consider hitting the like button and subscribing to the channel. That lets me know to make more content like this. Thanks, and with that out of the way, let's get into the stocks. In my opinion, every great long-term portfolio starts with a fund, especially if this is your first market crash or you just want to play it safe. Everything we've looked at so far tracks the S&P 500, but it applies just as much to the NASDAQ 100 since they have so many stocks in common. But, the NASDAQ only has 100 companies instead of 500, so it makes higher highs in bull markets and lower lows in bear markets, which is exactly what we're looking for to buy low while others are panic selling. One of the big challenges with tariffs is that increased prices often get passed onto consumers. A study from the National Bureau of Economic Research found that the costs of President Trump's trade war in 2018 were passed entirely onto importers and consumers. Rising prices means lower spending, which means lower earnings for companies, and ultimately lower stock prices. That means companies advertising or selling things directly to consumers are especially sensitive to tariffs, but that also means they have the most upside if you believe these tariffs won't stick. On the advertising side, Google is trading at a price-to-earnings ratio of 18, which is the lowest P.E. ratio it's seen in two years and the second lowest in over 10 years. The only time Google was trading cheaper than this was at the end of 2022, and according to discounted cash flow models like Simply Wall Street's, Google is currently 43% undervalued. Said another way, Google stock would have to go up 77% to hit its fair value today. That's a 77% upside. Like I said, millionaires are made when the stock market crashes, and now you can see why. On top of that, I think Google's earnings estimates tend to be on the low side. Analysts expect 10% earnings growth, but Google's earnings grew by 36% last year and 27% the year before that. Likewise, DCF models calculate the fair value for meta platforms at a whopping $880 per share, making it 43% undervalued today and giving it a 75% upside. And again, that assumes 10% earnings growth while they've actually been growing by more than double that ever since they stopped burning so much money on the metaverse. Another area of the market that's crashing hard is semiconductors, a very big focus of my channel. The Taiwan Semiconductor Manufacturing Company, or TSMC, makes 90% of all advanced chips on earth, including Apple's A-series and M-series chips for iPhones and MacBooks, Tesla's chips for full self-driving, and of course, Nvidia's GPUs. President Trump issued a warning that tariffs on foreign chip makers are starting very soon and they could hit 25% or higher. Like I've been saying though, I think this is more of a tactic to pressure TSMC into building more factories and chips on US soil, as opposed to a serious long-term tariff. We'll see how things play out over the coming months, but today, these headlines are driving TSM stock down to under $150 per share, while fair value is calculated closer to $225, that implies a 50% upside. The last company on my list is Nvidia itself, because it's trading at a PE ratio of 32. The last time it traded at a PE ratio this low was in 2019, when it was under $5 per share after adjusting for stock splits. Models calculate Nvidia as being 20% undervalued, but I actually think it has way more than a 25% upside in the years to come, and I've made many videos explaining why, but hopefully this video helped you understand what's causing the stock market crash. How long this crash could last, how to be greedy when others are fearful, and of course, give you some great stocks to think about once all this dust settles. Because relying on data instead of your gut is a great way to get rich without getting lucky. And if you want to see what else I'm buying to get rich without getting lucky, make sure to check out this video next. Either way, thanks for watching till the end even though I gave you everything up front. And until next time, this is Ticker Symbol You. My name is Alex, reminding you that the best investment you can make is in you.