US trade policy under tension: analysis and outlook

On April 2, 2025, the US government under President Donald Trump announced comprehensive new import tariffs. The measure represents a significant tightening of US trade policy and, according to the official justification, is intended to combat unfair trade practices and protect domestic industry.

The announcement subsequently led to significant price losses on the international stock markets. The global share index (MSCI World Index, in USD) recorded a fall of -9.9% between March 31 and April 7, 2025. The US S&P 500 lost -9.8%, the European EuroStoxx 50 -11.3% and the Swiss SMI even -12.3% in the same period.

As these figures prove, the markets have clearly reacted to the new trade policy situation. At the same time, the development raises questions about the future economic outlook and possible effects on the capital markets.

In the following, we would like to provide you with an overview of the implications from our perspective and how we classify the current situation in the context of our investment strategy.

Background

The tariffs announced by the US government on April 2, 2025 include several far-reaching measures that are likely to have a considerable impact on international trade:

Key points of the tariff measures

• Introduction of a general import duty of 10% on almost all goods
• Additional tariffs of 34% on Chinese products, leading to an overall rate of over 50% in many cases
  Introduction of 20% tariffs on imports from the European Union
• Other countries such as Vietnam, India, Mexico, Canada as well as Switzerland and Liechtenstein have also been hit with additional tariffs, particularly on goods with a high dependency on US imports
• The US government justifies these steps with the intention of creating more balanced trade conditions and responding to trade barriers in other countries with comparable measures. In this context, President Trump symbolically designated April 2 as “Liberation Day”.

Implications of the US tariffs

The announcement of new tariffs by the US government on April 2, 2025 was not fundamentally surprising. However, the breadth of the countries and products affected surprised both economic experts and the financial markets. The measures are likely to have far-reaching effects on the global economy, individual sectors and the financial markets, with corresponding consequences for global investment strategies.

Economists expect the following developments in particular:

• Trade distortions: Tariffs make imports more expensive, which could cause existing trade flows to be diverted, force new supply chains or cut off existing markets.
• Inflation risks: Higher import prices are likely to lead to a new rise in consumer prices, particularly in the USA.
• Dampening growth: The weaker investment and consumer climate could considerably slow down global economic growth.
• Monetary policy uncertainty: New inflationary impulses could slow down planned interest rate cuts or even force a return to more restrictive measures, e.g. by the US Federal Reserve.
• Currency risks: While currencies such as the yuan or the Mexican peso could come under pressure, the Swiss franc or the Japanese yen are considered “safe havens” in such periods.
• Rising market volatility: Uncertainty about economic policy reactions is intensifying movements on the equity, interest rate and currency markets.

In the days following the announcement, it became clear how sensitively the markets react to geopolitical interventions. The higher import duties are likely to be reflected in rising prices in the short term. This is particularly true in the USA, where inflation has already been falling recently. This increases the pressure on central banks to defer or at least delay monetary easing.

At the same time, companies that are heavily affected by imports are coming under pressure. Higher production costs and falling margins could hamper investment and lead to job losses. Many economists believe that this increases the risk of an economic slowdown, not only in the USA but also in Europe and Asia.

An additional uncertainty factor is the geopolitical scope. Initial countermeasures have already been taken, for example by China. Should this develop into a long-term trade conflict, this could have a significant impact on existing global supply chains and further reduce economic certainty.

Increasing uncertainty is also evident on the financial markets. In addition to share price losses in export-oriented sectors, there are increasing signs of rising fluctuations on the interest rate and currency markets. In the eurozone, the first economic forecasts have already been revised downwards.

The announced US tariffs could have a considerable negative impact on the global economic environment. Economists expect more uncertainty, a decline in investment and an increasing fragmentation of global trade. In the long term, a structural reorganization of global production and supply chains cannot be ruled out.

Think strategically instead of acting hectic

The introduction of new US tariffs at the beginning of April attracted global attention and put pressure on the financial markets. The impact on growth, inflation and corporate profits cannot yet be conclusively assessed. In such an environment, the question often arises as to whether it makes sense to adjust the investment strategy or whether it is advisable to maintain the existing strategy.

We clearly agree that it is crucial to remain prudent in such phases and not to compromise the long-term strategy. Experience proves that in stressful situations, the financial markets tend to exaggerate in the short term, which is often followed by rapid counter-movements.

Even though the discussion regarding the new US tariffs may continue to dominate the markets for some time, we assume that the political pressure on the US government is likely to increase further. Against this background, we remain cautiously optimistic that the current rhetoric could subside in the further course of the year, which would give the markets more stability again in the medium term.

In a market environment characterized by uncertainty, the focus is often not on a short-term reaction, but on a well-founded assessment of the situation. Experience shows that a strategically oriented investment strategy can unfold its strengths precisely in such phases. This approach is also supported by numerous studies that show that disciplined and patient behavior leads to better results in the long term, especially in volatile market phases.