Following President Donald Trump’s announcement of tariffs on steel and aluminum imports to the US, the stock market reacted negatively.

Tim Heisterkamp with Journal Financial says the stock market reacted negatively last week because any tariffs would mean an increase in consumer prices. Heisterkamp points out that when the Dow Jones Industrial Average plunged 700-points last Thursday, to another 400-points Friday, it has slowly been gaining back this week, before another drop on Tuesday.

“It certainly was a knee-jerk reaction because nothing had ever been inched yet, it was just the threat that tariffs were going to go on, which was the first thing that happened. Then the next thing you know after that then countries are talking about trade wars. China came out and had an announcement that they were going to put tariffs on some US goods. So that whole talk has had a negative effect on the stock market.”

Heisterkamp adds that tariffs exist all around the world against the US.

“It’s not really free trade and I think that’s what you hear the president saying quite a bit is that the trade agreements we have are not fair because we will allow other countries to bring their goods into the United States without tariffs. Yet we turn around and try to send our goods to their countries and we have to pay a tariff, that’s not free trade.”

Heisterkamp advises investors and consumers to wait and see how the process works itself out and it might not be as bad as people are saying it could be.