I thought that I’d been around long enough to see everything that markets can throw at me, but I hadn’t counted on a US President who is usually focused on money being so determined to destroy financial value. One of the fundamental cornerstones of economic theory is that it benefits everybody to concentrate on what they excel at. That’s why we don’t buy many watches from Italy, or pasta from Switzerland.

Erecting large tariff barriers is unquestionably a big negative for financial values and so markets have been right to react so much. I’m not going to spend much time trying to analyse what’s going on in his head, but my suspicion is that this exercise is primarily about demonstrating power.

If the projected tariffs persist for the long term, markets may well have further to fall. But if there’s one thing we can be sure about with Trump, it is to expect the unexpected. Also, do not underestimate the groundswell of opinion in the USA against these measures.

On that basis my approach is to sit tight and trust that ultimately sanity will return. Unlike the pandemic or financial crises, there’s actually a very simple solution here!

Any questions?