As markets debate how President-elect Donald Trump's tariff policy will stack up against his rhetoric on the campaign trail, where he said he would impose a 60% tariff on Chinese goods and 10% to 20% tariffs on all other imports. From the 2024 Schwab IMPACT conference, Yahoo Finance's Rachelle Akuffo sits down with Charles Schwab chief global investment strategist Jeffrey Kleintop to break his expectations around tariffs during Trump's second presidential term.

Kleintop says if you add up all of Trump's tariff claims, "it could bring the weighted average US tariff to 26% above way above 2.6% now, which [could be] above those Smoot-Hawley tariff levels that preceded the Great Depression. So there's reason for concern."

He notes, "We think the actual policies that will be implemented will be way smaller than that, so I think investors may not need to make major changes in their portfolios. Currencies very rapidly adjust to tariffs [and] I think the weighted average tariff could go up 5% or so. The dollar has already gone up 5% or so, mitigating some of [that] impact. So perhaps major changes are not necessary."

For investors looking to mitigate risks associated with Trump's expected tariff politics, he says, to look "for a diversification away from really what's been the dominant theme in the US, which is just about tech leadership, particularly, AI leadership ... If you look to Europe or even anywhere outside the US, financials are now the best-performing sector outside the US."

Watch the video above for more from Kleintop on his US tariff outlook, the impact on imports from China, the international AI trade, and more.

To watch more expert insights and analysis on the latest market action, check out more Wealth here.

This post was written by Naomi Buchanan.