Let's face it, Donald Trump's tariff announcements came as a shock – for the stock markets, for future economic growth, for geopolitical relations and for central banks torn between a slowdown in global economic growth and expectations of rising inflation.
One thing is certain: there will be a before and after 2 April. And the markets, like the global economy, will have to absorb the shock.
How can investors navigate such an environment?
That depends to some extent on whether tariffs remain in force or whether America’s trading partners come to the negotiation table.
Scenario one: Customs duties are maintained
If 2 April marks “the day America takes back control”, as Trump has declared, we can now ask ourselves at what price. If the tariffs are applied until 2026, here are the main impacts:
- Inflation in the US: +2.1% over 12 months according to Goldman Sachs, with a knock-on effect on 60% of commodities.
- US growth: -0.8% to mid-2026 due to weaker consumption, postponed investment and higher costs.
- Estimated job losses: 600,000 job losses in the retail, logistics and consumer sectors, according to projections from the National Retail Federation.
- Eurozone growth: The introduction of tariffs by the US on imports from the EU is expected to have a significant negative impact on eurozone growth. According to some estimates, these measures could reduce GDP growth in the eurozone by between 0.3 and 0.5 percentage points.
There are three major strategic implications to Trump's decision on Wednesday evening under scenario one:
- Inflation is making a comeback: Customs duties are an indirect tax on consumers. An average customs duty of 10% on $3trn of imports represents an annual impact of $300bn on household purchasing power. This reintroduces a cost-driven inflation dynamic just when central banks were hoping for normalisation.
- Deglobalisation is gathering pace: We are entering a world where national resilience matters more than global efficiency. Supply chains are fragmenting, pricing power is returning to national producers and economic nationalism is no longer a marginal concept.
- Evolution of investment strategy: Forget about widespread market rallies. The winners will be companies with pricing power, US-centric supply chains and exposure to reindustrialisation themes: infrastructure, energy, defence, relocation and food security.
In short, scenario one is not just an announcement of tariffs but a breakdown of the global trading system. Supply chains, monetary policy, inflation expectations and valuation models all need to be recalibrated.
Scenario two: Trump’s tariffs are a shock tactic ahead of trade negotiations
What if Liberation Day was just a bluff that worked too well? The question deserves to be asked.
The markets are beginning to assess a second, more nuanced scenario: Trump's tariffs are a shock tactic, designed to maximise leverage ahead of behind-the-scenes trade negotiations.
Here are the major implications of scenario two:
- The general 10% tariff remains in place as a ‘new normal’ baseline – manageable for most sectors.
- But higher reciprocal tariffs (20-54%) on ‘bad actors’ such as China, Switzerland, Vietnam or the EU could be suspended or reduced over the next 60 to 90 days in exchange for concessions (on digital taxes, cars, pharmaceuticals or defence spending).
- Trump could then claim victory and say ‘they blinked first’.
Here are the economic implications of scenario two:
- Estimated slowdown in world GDP limited to -0.3% to -0.5% (compared with -1.5% in scenario one).
- US inflation continues to rise, but peaks at 3.6-3.8% year-on-year, without exceeding 4%.
- Treasury yields remain volatile in the short term but are stabilising as recession fears ease.
- The euro strengthens slightly against the dollar, with the EU avoiding a 20% cut.
The investment implications of scenario two re as follows:
- A recovery in global equities is likely, particularly in Europe's luxury, automotive and technology sectors.
- The dollar weakens slightly, gold consolidates but does not continue to soar.
- We will be watching the outperformance of emerging Asian countries, particularly Vietnam, Thailand and Taiwan, if the targeted tariffs are quickly removed.
But make no mistake: even in scenario two, the rules of the global game have changed. The genie of economic nationalism is out of the bottle.
How do you invest in such an environment?
When the world's great balances are upset, when international trade becomes a battlefield of tariffs and when financial markets sway to the rhythm of political declarations, the ‘3D’ rule stands out more than ever: diversification, diversification and diversification.
But beware: it is no longer simply a question of diversifying your equity portfolio between Europe, the US and Asia. We now need to think in terms of economic regimes: structural inflation, the return of protectionism, the fragmentation of blocs. This calls for a new portfolio architecture that is more robust, more flexible and more resilient.
What does this mean in practical terms?
Firstly, diversifying asset classes: beyond listed equities, hedge funds help to capture volatility, private equity strategies remain attractive from a long-term perspective and gold is once again an essential building block in times of geopolitical and monetary tension.
Secondly, we need to diversify our sector exposure, focusing on the structural winners of a potential new cycle while reducing our exposure to sectors dependent on a globalisation that is faltering.
Finally, it means diversifying currencies and regulatory zones, because investing in 2025 also means protecting against political shocks. Legal, fiscal and monetary stability are becoming asset classes in their own right.
It is vital not to stand still in a changing world. Be global, agile, multipolar... and above all, accept that tomorrow's portfolio will not be like yesterday's. ‘Diversification, diversification, diversification’ is no longer just an option: it's a condition of financial survival.
Ultimately, 2 April will go down as a turning point in the history of world trade. Trump's announcements sent shockwaves through the world, with markets under stress, inflation on the rise and trading partners on the defensive. The certainties of globalisation are shattered, replaced by a logic of economic confrontation. In this new environment, every investor will have to rethink their bearings and their portfolios.
John Plassard is a senior investment specialist at Mirabaud Group. The views expressed above should not be taken as investment advice.