Tariffs – Death By 52 cuts & Counting
Tariffs announced in the Rose Garden today raise US average effective tariffs to 25%. That’s quite an exogenous shock given they were 3% when President Trump too office! These tariffs are not transitional. They are core to President Trump’s beliefs. They mark the shift from globalisation to isolationist, nationalist policies – and not just for economics. The process will last several years and be felt for decades. There will be spillovers into multiple policy domains such as geopolitics.
Right now expect retaliation not negotiation by the EU (targeting US services) and China (focussing on US strategic and business interests).
The Rose Garden tariffs will cement the bear market. They will cause global stagflation as well as US and EU recession. The US $ will wither as US exceptionalism dies. Own Yen. India, China and Japan will be seen as relatively safer places to put money. I would own all. Otherwise stick to safe haven assets like gold and cash