Market Update: Trump & Tariffs!
You may have seen headlines in the past few days about renewed volatility in global financial markets. The catalyst this time has been the US government’s announcement of unexpectedly high new tariffs – which many see as the first step in a potential trade war with China. These “reciprocal” tariffs, averaging around 18.5%, were larger than markets had priced in, and China’s retaliatory 34% tariff has added further pressure.
As a result, March ended on a negative note. Global equities fell by 6.3% for the month, and US markets led the decline, down 7.9% in sterling terms. Government bond markets were mixed, with yields initially rising on inflation concerns, before falling back as investors sought safer assets. At the same time, gold rose and Bitcoin fell – both signs that market sentiment had turned risk-averse.
While it’s natural to feel uneasy during such times, it’s important to remember: we’ve seen this before. A notable example is the COVID-19 pandemic in 2020, when markets experienced a sharp, sudden fall followed by a rapid and strong recovery. Long-term investors who stayed the course were rewarded, while those who reacted hastily often missed the rebound.
It’s often said that markets take the stairs up and the lift down – but they often recover just as quickly as they fall. Volatility is part of investing, and history shows that periods of uncertainty are often followed by opportunity.
Looking ahead, it’s worth noting that these tariff announcements may be an opening move in a broader negotiation strategy. President Trump has indicated a willingness to talk, and other governments – including the UK and Europe – appear ready to support growth through fiscal and monetary measures if needed.
Our message remains simple: give the market time to stabilise. Your portfolio is built with the long term in mind, diversified across regions and asset classes, and designed to weather these kinds of shocks. We’re monitoring developments closely and will continue to assess whether any changes are required.
If you’d like to discuss your portfolio or simply talk things through, we’re here for you.
