Tariffs have pride of place in President Trump’s toolbox. We have only seen them applied to fentanyl and immigration so far. But they can and will be used as instruments to correct perceived economic imbalances and imperialist territorial ambitions.
Tariffs are a major accelerant of deglobalisation - a process that substitutes a less efficient economic system for a more efficient (if inequitable) one. the results will be lower growth and higher inflation.
President Trump's tariffs make this happen as an exogenous shock rather than an endogenous process, which was already under way for 5-7 years.
I expect: • the end of US exceptionalism. • a global arms race (a highly investable theme). • A bear market in both bonds and equities with loops to the real economy through falling asset prices, credit flows and confidence.