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Wealth Managers Rethink Strategy Amid Tariff-Induced Turmoil

Tom Burroughes

9 April 2025

(Updates with latest market moves in Asia.)

Wealth managers are reshaping their investment strategies after Donald Trump slapped tariffs of at least 10 per cent – and far more in specific cases – on a host of countries, including members of the European Union, Japan, China, the UK, Singapore and nations in Southeast Asia such as Vietnam.

US stock futures fell this morning in Asia; Asia equities, such as in Hong Kong and Japan, posted sharp falls, continuing the bloodletting of Friday; the yield on the US Treasury bond has fallen below 4 per cent. now fetching 3.911 per cent. JP Morgan analysts have (source: Wall Street Journal, 4 April) increased expectations of a US recession to 60 per cent.

Trump’s tariffs, which he said are designed to reshore manufacturing business and jobs, are part of a strategy, along with deregulation and domestic tax cuts, which are designed to foster a more “America-First” policy mix. The policies highlight how decades of a process, sometimes dubbed “globalisation,” is unravelling. 

Chris Rossbach, chief investment officer at investment house , said: “Longer term, companies will adjust to the new paradigm and find ways to grow profits. Big shocks to the system have a way of accelerating change, even if it's not their intended effect (e.g. digitalisation during Covid-19). If the goal of the tariffs is to level the trade playing field and bring manufacturing capacity back to the US, there is no doubt that artificial intelligence and robotics will play a role, and companies may need to figure that role out sooner rather than later. 
 
“One of the things that didn’t change yesterday is the profit motive inherent to a free enterprise capitalist system. Policy doesn’t change that (case in point, from 1951 to 1964, the top corporate tax rate in the US was 50 per cent or greater, and yet over that time frame, the S&P 500 rose 650 per cent, or 15.5 per cent annually). Companies are alive, and they will adapt," Mayfield said.

Seema Shah, chief global strategist at policy path is relatively straightforward. While recent weeks have seen some hesitation around the need for additional rate cuts, the combination of weaker growth prospects and a stronger euro makes a rate cut at the ECB’s April meeting highly likely. If a recession becomes more probable, multiple additional cuts could follow,” Shah said. 

Moves by Germany, following recent national elections, to ease the “debt brake” and increase spending on defence and infrastructure will provide some positive relief for the German and European economy, Shah said. 

Turning to China, Shah said that Trump’s imposition of a 54 per cent tariff on the Asian giant is close to the original 60 per cent tariff that President Trump had initially threatened. 

“The 54 per cent is also still larger than most forecasters were expecting. With tariff rates on several other Asian economies rising to levels that will likely tip them into recession (for example, Vietnam has been hit with a nearly 50 per cent tariff), It will be challenging for China to re-route their exports,” Shah said. 

“Additional stimulus from , the firm pondered on what the tariffs and market falls mean for gold. The yellow metal has risen above $3,000 per ounce in recent weeks.
 
“Gold is likely to be seen as a reliable hedge against market volatility, especially amid rising uncertainties under Trump 2.0 administration. The current gold bull run could be prolonged if trade tensions escalate, including longer-than-expected trade renegotiations and a continued cycle of US and retaliatory tariffs,” James Ooi, market strategist, Tiger Brokers, said. 

“Aside from gold, short-duration bonds such as money market funds (MMFs) may see increased inflows, as they tend to have low correlation with equity markets. For instance, US money market fund assets have climbed to nearly $7 trillion, about 46 per cent higher than their Covid-era peak of $4.8 trillion.”

said the tariffs will be bad for global growth, including in places such as the European Union and UK, and it is likely that the EU will hit back. 

“We estimate that the increase in US tariffs could knock 0.4 to 0.7 percentage points off EU GDP and 0.3 to 0.6pp off UK GDP. This is the direct effect. There are indirect costs from abroad, including a meaningful increase in recession risk in the US.

“The impact on inflation is ambiguous. Retaliatory tariffs lift inflation, and foreign exchange weakness and supply chain disruption are inflation risks. On the other hand, weaker growth is disinflationary, and the higher tariffs faced by third countries increases the risk of disinflationary trade diversion,” the bank said.