Tariffs & Global Markets

US president Donald Trump's tariff implementation on autos and steel imports, tax on Chinese goods and levies on Canada and Mexico would likely lead to a dampened demand for imports to the US while making US exports more competitive relative to other global competitors across global markets. Shrinking US GDP data causes global investors to price in a potential recession in the near term. Even if investors discount the noisy consumer data, other sectors such as Tech and EVs remain competitive in the global markets. Investors who seek to diversify their portfolio would rebalance their asset mix and we will likely see an outflow of capital from consumer discretionary sectors to sectors that offer better equity returns.