The Tariff Time Bomb

More of your firsthand experiences with tariffs… Small businesses are paying the price… Tell us the other side… Nvidia hits a $4 trillion market cap… We've been on it since 2004… What copper tariffs mean…

We begin today with more of your feedback on tariffs...

Your firsthand experiences with tariffs continue to fill our inbox... Keep them coming. We want to know about what's going on in the real world beyond news reports and social media posts, and other subscribers have already said the same.

Yesterday, we shared the first batch of notes we received on how tariff reality and confusion are affecting some of our subscribers' businesses – from the auto industry, to paint, to aluminum. And since then, we've heard from more of you...

We'll start with subscriber P.L. Like a few subscribers yesterday, P.L. agrees that tariffs may lead small businesses to fail and that uncertainty around tariff rates has been paralyzing...

I am a second-generation furniture manufacturer from NC. The [Canada] tariffs wiped out half my business. The China fabric tariff has hurt the other half due to cost and the unknown. If something doesn't change FAST, I think the furniture manufacturers will be gone. I have had a blessed 42 years in the industry and will be fine but, [it's] sad.

Subscriber C.L. says higher prices are everywhere they look because of tariffs...

I am the president of a distribution company. Nearly all of our 30+ vendors have issued tariff-based price increases varying from 5% to 30%. Tariffs are absolutely causing increased prices.

A.M. sees the same thing, writing...

I have my own business with six [employees] and one partner. There is inflation. Salaries, supplies, professional services. Do not be fooled. Every friend who has a business says the same!!!        

Based on this feedback and what we heard yesterday, things don't sound promising to me (Corey McLaughlin). It seems like only a matter of time before businesses' higher expenses really smack consumers with higher prices... and the U.S. economy with higher unemployment.

For now, though, Wall Street is unconcerned... The benchmark S&P 500 Index traded back at new highs today.

Other folks are calling for patience...

In our feedback, some other subscribers say they're willing to accept short-term pain for long-term gain, as President Donald Trump has encouraged. Here's subscriber E.C...

While many folks will pay more for imported 'stuff', the idea is to get them to buy American made goods – not pay more.

People need to understand that our trading 'partners' (more like adversaries) have been soaking us for nearly 60 years and [Trump] is out to level the playing field (and it's about time).

Wouldn't it be nice to buy American made furniture and clothing again?

Subscriber F.A. has similar thoughts...

With all the talk about tariffs, it's about time we level the playing field. You are right in that it costs more to make products in the U.S., but we need to be buying from countries that like us instead of countries that don't like us.

We need better products instead of cheap non-fixable products.

I wouldn't use an iPhone if you gave it to me.

(Side note: I will not give you my iPhone, but point taken... Related: I have always gotten a kick out of people going online to protest capitalism via their iPhones.)

And subscriber T.L. says it may all work out...

As a CPA, my business does not suffer from tariffs. My clients are mostly small, so they do not suffer much either. I feel for all of the businesspeople who have replied to you. My hope is that it will be a temporary inconvenience. While tariff increases hurt our smaller businesses in the short term, we hope that they will help later...

Tell us the other side...

Subscriber N.P. wants to hear from business owners who have been helped by tariffs (we do, too)...

One news channel has talked with farmers and other small businesses who say that tariffs have helped them tremendously. The tariffs have protected them from lower cost, lower safety products coming in from other countries. The tariff trade deals have included requirements for other countries to buy more of our products, particularly farm products.

Is there a way that you can get feedback from this group of small business owners? More input from a wider range of small businesses would be helpful to provide a more complete picture of the tariff 'puzzle'...

To this point, yesterday, we asked for people to send in replies if they had "a different view" for this very reason, but received just one additional note in that vein, from subscriber S.R...

I have yet to be affected by tariffs in any personal sense.

At work, my company redirected a few things and shipped a product to Salt Lake City rather than Canada for additional processing.

Looking at costs for parts and supplies we purchase, the pricing is in line with what we were paying in January and some have even decreased.

So there is that part of the story, too, where "nothing has changed." The stock market seems to concur, with the S&P 500 now on the other side of a V-shaped recovery after the Liberation Day "tariff tantrum."

Interestingly, though, we haven't heard from anyone who says they've overwhelmingly benefited from tariffs so far... other than Trump saying that the U.S is raking in the dough from import taxes. But if you're out there, please write to us, and we'll keep looking.

Finally, today, here's subscriber K.L., who wants us to keep going...

Keep the comments coming in your newsletter. Hearing from the 'trenches' is both helpful and informative, unlike so many questionable news reports.

We'll plan to keep the discussion going, so if you have insights or comments, send them to feedback@stansberryresearch.com.

And if you haven't seen your note appear here yet, like a great one from subscriber C.R. we're looking forward to sharing, don't fret. We read every message and will likely address it next week, following Dan Ferris' essay tomorrow and our weekend Masters Series.

A note for posterity: Nvidia makes history...

Yesterday, Nvidia (NVDA) became the world's first public company to cross a $4 trillion market cap. That happened quick. It was only back in 2018 when Apple (AAPL) became the world's first $1 trillion publicly traded company.

Nvidia's rise has been "meteoric," as our friend and colleague Steven Longenecker put it today in a new article for our free Stock Market Trends. The $4 trillion milestone arrived during trading yesterday...

That single trading‑floor heartbeat crowns three decades of relentless innovation in graphics processing, data-center dominance, and artificial-intelligence ("AI") infrastructure.

It also vindicates years of prescient research from Stansberry Research analysts who framed Nvidia as the hardware "arms dealer" of the AI revolution – a role that is now larger than the entire U.S. industrial sector of the 1960s.

At $4 trillion, Nvidia trades around 20 times forward sales and upward of 50 times forward earnings. Those ratios exceed peak dot‑com multiples... and yet the company has grown faster than any mega‑cap in history.

Our company's coverage of Nvidia goes as far back as September 2004, when it traded at a split-adjusted price of about $0.12 per share and was recommended in our flagship Stansberry & Associates Investment Research newsletter by analyst Graham Summers.

He noted heavy insider buying at the time, detailed opportunities in the company's computer chip and data-rich technology, and referred to the stock's "bargain basement current valuation." He wrote...

The company I'm writing about is Nvidia Corp (Nasdaq: NVDA), the leading GPU designer in what has become a $1.8 billion industry. And if you think making a play on computer games is childish, you're in for a real surprise.

I'd say.

The 'AI' secret...

As Steven continued... years later, but still long before the stock was on Wall Street's radar, Stansberry Research subscribers were also tipped off to the role Nvidia would soon play in artificial intelligence...

In May 2016, Stansberry Venture Technology editor Dave Lashmet dedicated a monthly issue to Nvidia titled "When Machines Come to Life" (link for paid subscribers). Dave put it this way:

When machines begin learning for themselves, it will be a watershed moment in human history. And these "artificial brains" will bring huge profits to early investors...

And although Nvidia is a well-known tech company, nobody on Wall Street is betting on artificial brains as a business segment.

At the time, NVDA shares were trading at a split-adjusted $1.13 per share. And as you can see in the chart below, shares have surged more than 14,000% since...

Along the way, Dave closed out partial positions that amounted to a total weighted average gain of more than 600%, including one partial position that delivered a 1,466% return in 2022 – the highest-returning closed position in Stansberry Research history.

It can pay to do research and be early, so we'll keep working.

In other news, let's circle back to copper...

Earlier this week, Trump announced a 50% tariff on copper imports.

As we touched on Tuesday, the headline sent copper prices soaring to a fresh all-time high. The metal gave up some of those gains Wednesday but is still up more than 35% so far in 2025.

And this is where tariffs' multilayered impact becomes apparent. In a Truth Social post last night, Trump cited a "national security assessment" as the reason for the new tariffs. From the post...

Copper is necessary for Semiconductors, Aircraft, Ships, Ammunition, Data Centers, Lithium-ion Batteries, Radar Systems, Missile Defense Systems, and even, Hypersonic Weapons, of which we are building many. Copper is the second most used material by the Department of Defense!

But copper is used in much more than just the defense sector. It's a critical component for just about anything. As our Commodity Supercycles team explained in their May issue...

Copper is an essential commodity. The base metal is a vital component in electrical wiring, telecommunications, motors, and across the construction industry. It's crucial for making electric vehicles and for renewable-energy infrastructure.

We use a lot of it here in the U.S. Last year, the U.S. consumed about 1.6 million metric tons of copper. That put us just behind China in terms of total copper consumption. But only about 1 million metric tons of that was produced here in the U.S.

So the tariffs impact nearly half of U.S. consumption...

And it's bad news in the short term for some of the largest copper-mining stocks – like Southern Copper (SCCO), BHP (BHP), and even Freeport-McMoRan (FCX). These companies have some mines in the U.S., but they get the bulk of their supply from countries like Chile and Mexico.

Trump could be implementing this tariff to try and boost domestic copper production. According to the U.S. Geological Survey, the U.S. has about 48 million metric tons of copper reserves – good for more than 5% of the global supply.

And that means the U.S.'s own reserves could cover about 27 years of consumption, if it remains steady at today's level. But with AI, electric and autonomous vehicles, and renewable energy, we're willing to bet copper demand only picks up from here.

Unlocking that supply is easier said than done, too. It can take more than a decade for a copper mine to get from discovery to production. So if the tariffs take place as announced, nearly every part of the economy will feel the pain.

Copper's not the only critical material 'coming home'...

This morning, rare-earth-mineral company MP Materials (MP) announced that the company had extended its partnership with the U.S. Department of Defense.

The partnership will provide MP Materials with the funding to open a second magnet plant in the U.S. In return, the government gets a 15% stake in the company, and (hopefully) a steady stream of rare earth elements ("REEs").

Like copper, REEs play an incredibly important part in U.S. technology. As the Commodity Supercycles team explained in their August 2022 issue (get ready for some perhaps unfamiliar mineral names here)...

REEs like yttrium, terbium, and europium are used to make visual displays for everyday electronics. Cerium is used to refine petroleum and in catalytic converters to remove impurities in gasoline in cars, while neodymium-iron-boron magnets are used in electric motors. In the medical field, gadolinium is necessary to build X-ray and MRI machines. For military application, the F-35 stealth fighter uses around 920 pounds of REEs. And a typical smartphone uses 16 of the 17 elements.

MP Materials owns the only operational rare earth mine in the U.S., located in Mountain Pass, California. And it's the second-largest rare earth mine in the world.

That's incredibly important. China controls nearly all of the world's rare earth refining. And it won't let us forget. It uses that strong position to cut off supply to the U.S. during trade tiffs.

It's clear that by securing and strengthening U.S. copper and rare earth supplies, the government is looking to help lock up supply of critical materials.

But as much as the trend to "reshore" is underway, we'll still rely heavily on other sources. It will take years for domestic copper and rare earth production to shift back to the U.S.

Taking time can be the way to do things in the real world, of course. But as we know, patience is not one of Mr. Market's traits. Economic pain, even if it's temporary, could tamp down stocks' current euphoria. 

New 52-week highs (as of 7/9/25): Atour Lifestyle (ATAT), Broadcom (AVGO), Alpha Architect 1-3 Month Box Fund (BOXX), Dimensional International Small Cap Value Fund (DISV), iShares MSCI Germany Fund (EWG), iShares MSCI Italy Fund (EWI), iShares MSCI Spain Fund (EWP), SPDR Euro STOXX 50 Fund (FEZ), Cambria Foreign Shareholder Yield Fund (FYLD), GE Vernova (GEV), iShares Convertible Bond Fund (ICVT), iShares U.S. Aerospace & Defense Fund (ITA), Lincoln Electric (LECO), Microsoft (MSFT), Ormat Technologies (ORA), ProShares Ultra Technology (ROM), ProShares Ultra Semiconductors (USD), Vanguard FTSE Europe Fund (VGK), VeriSign (VRSN), Vistra (VST), and Industrial Select Sector SPDR Fund (XLI).

We shared more of your tariff feedback above. Keep it coming... Send any other comments, questions, or observations to feedback@stansberryresearch.com.

All the best,

Corey McLaughlin with Nick Koziol
Baltimore, Maryland
July 10, 2025