Investment Considerations for the Second Trump Presidency

Key Takeaways

  • President-elect Donald Trump’s proposed trade policies, particularly tariffs, are anticipated to place additional strain on international businesses.
  • The broader economic consequences of Trump’s trade policies, including potential inflation, higher Federal Reserve policy rates, and a stronger dollar, present a mixed bag of challenges and opportunities for investors.
  • This pivot underscores the need for businesses and investors to adapt to a potentially more insular and uncertain US trade approach.

With the upcoming inauguration of President-elect Donald Trump on January 20, 2025, the financial world is abuzz with speculation and analysis regarding the potential market impacts of his proposed policy changes. Trump’s intention to implement comprehensive tariffs, especially targeting Chinese goods and introducing “universal tariffs” on all global imports, marks a significant pivot towards protectionist trade policies. This shift is expected to exert additional pressure on international businesses, which are already navigating the complexities of existing US tariffs and a global trend towards similar trade measures.

Trump’s plans include a baseline 10% import tariff on all foreign-made goods, a 60% tariff specifically on Chinese products, and a full 100% tariff on imported cars. These proposals signal a substantial intensification of the ‘America First’ trade stance, potentially affecting various sectors in divergent ways.

The broader economic implications of Trump’s trade policies, including the potential questioning of the risk-free status of US Treasuries, are a subject of intense speculation. The introduction of such tariffs could also lead to inflation, higher Federal Reserve policy rates, and a stronger dollar, thereby posing challenges and opportunities for investors.

Here, we share insights from a range of portfolio managers on what to expect under a Trump presidency and the importance of actively navigating the anticipated challenges.