Market Update – 3rd April 2025
‘Liberation Day’
The much-anticipated announcement by President Trump of his Trade Tariff policies took place at 4.00pm ET yesterday. The Administration have applied a baseline 10% tariff for all countries with a surcharge on those countries that Trump feels have unfair trade terms that impact the US.
What it is important to point out is that this is being viewed by the Administration as a starting point for negotiations to improve terms for the US and Scott Bessent, the US Secretary of the Treasury, has urged trading partners not to retaliate with reciprocal tariffs as there is scope to negotiate the numbers down.
In the short-term there will undoubtedly be implication for Equities, Bonds and Interest Rate expectations. Equity markets around the world have opened lower as the new trading backdrop impacts growth expectations. Bonds have also been impacted as the inflationary impact of tariffs is being digested and the announcement has also create rate policy uncertainty as Central Banks juggle the conflicting pressures of maintain growth whilst keeping inflation under control.
As we have mentioned in recent communications, the backdrop is changing by the day as Trump plays this dangerous game of economic poker. The possibility of the tariff proposals being watered down, as the blowback impact on the US Economy becomes more apparent, is always there with the current leadership. There is therefore a strong case for living with the short-term volatility for the potential benefits that could arise if a change of direction takes place.
We will continue to monitor the situation and provide our best insights as to how to navigate investment markets to the best of our ability.
Book your free initial consultation: call us on 0141 632 2406 now