Markets, investors, and companies need certainty. Without it, investment is deemed too risky with all its economic side effects. With the Trump presidency, certainty has been AWOL. It is inconceivable that the daily U-turns, contradictory policies, and incoherent narratives are all part of the ’strategic uncertainty’ created intentionally to gain leverage in trade talks.
There is something of a stall occurring in markets this morning as the delight shown by pent up investors dissipates following the détente in tariffs between the US and China. Maintaining a bullish stance based upon the principle that the deal is not as bad as it could have been can only keep realism away for so long. Just because one part, admittedly the most important, of the global trading puzzle is temporarily solved, it does not mean the same will be true of all relationships.
Whether the tariff policy of the US Administration jeopardises US and global growth and poses any danger to public finances depends on one’s view. For the medium-term, as discussed below, it is a gnarly undertaking to foretell an unconditional prosperity. We are, however, living at times when planning for the medium, let alone long-term, is simply irresponsible.
Copyright © 2025 TP ICAP