Although the US administration’s tariff announcement on 2 April added some clarity to its trade stance, the situation remains fluid. 

The US announced a levy of 10% on nearly all US imports from 5 April as well as additional tariffs on some trading partners.

All other factors being equal, higher tariffs and other barriers to trade are likely to slow economic activity and lift inflation¹—at least in the short term. 

In the medium to longer term, however—the latter period being the most important one for investors—trading partners are likely to adjust their policies. Affected countries are likely to negotiate with one another. Further policy adjustments may follow. 

Companies and consumers may reconsider their saving, spending and investment plans. Central banks may also reconsider their interest-rate policies to support economic growth and keep inflation stable. For investors, uncertainty is likely to remain.

We have extensive experience of navigating significant economic and political events and other market uncertainty.

Cautioning investors against short-term portfolio changes

Given the potential for tariff countermeasures from trading partners, it is difficult to identify specific investment implications immediately following the announcement. 

Financial markets may respond quickly to developments as they unfold, but we would caution long-term investors against reacting with short-term changes to well-considered investment plans. 

The bottom line is to keep perspective, focus on the long term and maintain a balanced portfolio that reflects your goals and attitude to risk.

¹ Inflation is the rate of increase in prices for goods and services.

Investment risk information

The value of investments, and the income from them, may fall or rise and investors may get back less than they invested.

Important information

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The information contained herein is not to be regarded as an offer to buy or sell or the solicitation of any offer to buy or sell securities in any jurisdiction where such an offer or solicitation is against the law, or to anyone to whom it is unlawful to make such an offer or solicitation, or if the person making the offer or solicitation is not qualified to do so. The information does not constitute legal, tax, or investment advice. You must not, therefore, rely on it when making any investment decisions.

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