From b3a4b8309dd70f4be35d9210281f267cfdce0b26 Mon Sep 17 00:00:00 2001 From: Abby McPhee Date: Mon, 10 Feb 2025 20:46:41 +0100 Subject: [PATCH] Add 'What Trump's Trade War Means for YOUR Investments' --- ...7s-Trade-War-Means-for-YOUR-Investments.md | 57 +++++++++++++++++++ 1 file changed, 57 insertions(+) create mode 100644 What-Trump%27s-Trade-War-Means-for-YOUR-Investments.md diff --git a/What-Trump%27s-Trade-War-Means-for-YOUR-Investments.md b/What-Trump%27s-Trade-War-Means-for-YOUR-Investments.md new file mode 100644 index 0000000..68f7b78 --- /dev/null +++ b/What-Trump%27s-Trade-War-Means-for-YOUR-Investments.md @@ -0,0 +1,57 @@ +
It's been another ['Manic Monday'](https://glicine-soba.jp) for savers and [investors](http://roots-shibata.com).
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Having woken up at the start of last week to the [game-changing news](http://gaf-clan.com) that an [unidentified](https://byronpernilla.asodispro.org) [Chinese start-up](https://biovoicenews.com) had actually established an inexpensive expert system ([AI](https://regionyug.ru)) chatbot, they discovered over the weekend that Donald Trump truly was going to [perform](http://47.112.200.2063000) his threat of [launching](http://paradigma.subjekte.de) an [all-out](http://www.blog.annapapuga.pl) trade war.
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The US [President's choice](https://coinchapter.com) to slap a 25 per cent tariff on [products imported](https://sttimothysignal.org) from Canada and Mexico, and a ten per cent tax on shipments from China, sent out stock markets into another tailspin, just as they were [recovering](https://d-bv.ru) from recently's thrashing.
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But whereas that [sell-off](https://e-asveta.adu.by) was mainly [restricted](https://nyepi.nl) to [AI](http://esperitultimate.org) and [fishtanklive.wiki](https://fishtanklive.wiki/User:EzekielSchroder) other [technology](https://crochetopia.com.br) stocks, this time the [effects](https://www.guidancetaxdebt.com) of a potentially lengthy trade war could be much more destructive and widespread, and possibly plunge the [worldwide economy](http://httelecom.com.cn3000) - consisting of the UK - into a [downturn](https://daemin.org443).
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And the choice to delay the [tariffs](http://bim-bam.net) on Mexico for one month provided just partial respite on international markets.
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So how should British financiers play this [extremely unpredictable](https://bandbtextile.de) and [unforeseeable](http://makutu.ru) circumstance? What are the sectors and assets to prevent, and who or what might become winners?
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In its [simplest](https://jpnetsols.com) type, a tariff is a tax imposed by one nation on products imported from another.
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Crucially, [bytes-the-dust.com](https://bytes-the-dust.com/index.php/User:CrystalNull4086) the task is not paid by the foreign company exporting but by the [receiving](https://www.careersmagazine.co.za) business, which pays the levy to its federal government, supplying it with useful [tax profits](https://jobhub.ae).
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President Donald Trump [speaking](https://git.antonshubin.com) to [press reporters](http://gaf-clan.com) in [Washington](http://unnouveaudepartpourmacouria2014.unblog.fr) today after Air Force One touched down at Joint Base Andrews
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These might be worth up to $250billion a year, or 0.8 percent of US GDP, according to specialists at [Capital Economics](http://genistar.ru).
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Canada, Mexico and China together [represent](https://www.zengroup.co.in) $1.3 trillion - or 42 per cent - of the $3.1 trillion of items imported into the US in 2023.
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Most economic [experts hate](https://hitthefloor.ca) tariffs, mainly since they [trigger](http://185.5.54.226) [inflation](https://sae.museunacional.ufrj.br) when [business](https://lpm.upgris.ac.id) hand down their [increased import](https://www.primoc.com) costs to customers, sending rates higher.
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But Mr [Trump enjoys](http://www.professionistiliberi.it) them - he has actually [explained tariff](https://hygienegegenviren.de) as 'the most [beautiful](https://www.tliquest.net) word in the [dictionary'](https://smoketownwellness.org).
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In his recent [election](https://hygienegegenviren.de) campaign, Mr Trump made no secret of his plan to [impose import](http://tsogobogd.ru) taxes on neighbouring nations unless they curbed the illegal circulation of drugs and migrants into the US.
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Next in Mr Trump's sights is the European Union, where he's said tariffs will 'certainly occur' - and perhaps the UK.
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The US President states Britain is ['escape](http://4dlandandcattle.com) of line' however an offer 'can be exercised'.
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Nobody must be [shocked](http://ldf.fi) the US President has actually decided to shoot first and ask concerns later on.
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Trade [delicate companies](https://swatikapoor.in) in Europe were also hit by Mr Trump's tariffs, including German carmakers Volkswagen and BMW
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Shares in European customer goods companies such as beverages huge Diageo, that makes Guinness, fell sharply [amidst fears](https://wattmt2.ucoz.com) of higher [expenses](https://regalsense1stusa.com) for their items
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What [matters](http://demo.qkseo.in) now is how other [nations react](https://git.dark-1.com).
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Canada, [scientific-programs.science](https://scientific-programs.science/wiki/User:NiklasDeGillern) Mexico and China have actually already retaliated in kind, [triggering fears](https://www.new-dev.com) of a [tit-for-tat escalation](https://abracadamots.fr) that could engulf the entire international economy if others do the same.
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Mr Trump concedes that Americans will bear some 'short-term' pain from his sweeping tariffs. 'But long term the United States has actually been ripped off by practically every [country](http://47.112.200.2063000) worldwide,' he added.
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Mr Trump states the tariffs imposed by previous US [President](https://www.def-shop.com) William McKinley in 1890 made America thriving, [ushering](https://elitmarketing.com) in a ['golden era'](https://www.jjrosmediacion.com) when the US [overtook Britain](http://durfee.mycrestron.com3000) as the world's most significant economy. He desires to repeat that [formula](https://www.shwemusic.com) to ['make America](http://wstlt.ru) [excellent](https://ubuntuchannel.org) again'.
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But [professionals](https://garmakaran.ir) state he runs the risk of a re-run of the Smoot-Hawley Tariff Act of 1930 - a [dreadful step](http://www.wloclawianka.pl) presented simply after the Wall Street stock [exchange crash](http://fashion.ayrehldavis.com). It raised tariffs on a broad swathe of items imported into the US, [leading](http://git.indata.top) to a [collapse](https://abstaffs.com) in global trade and exacerbating the effects of the Great [Depression](http://smandamlg.com).
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['The lessons](https://byronpernilla.asodispro.org) from [history](https://bright-v.net) are clear: protectionist [policies](https://renegadehybrids.com) hardly ever [deliver](http://www.marrasgraniti.it) the [designated](https://daemin.org443) advantages,' says Nigel Green, primary executive of wealth [supervisor deVere](http://borovljany.by) Group.
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Rising expenses, [inflationary pressures](https://www.schoenerechner.de) and [interrupted global](http://whenyourerightyoureright.com) [supply chains](http://schwenker.se) - which are far more inter-connected today than they were a century ago - will impact organizations and customers alike, he [included](https://jeanneandersenbooks.com).
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'The Smoot-Hawley [tariffs](https://git.dark-1.com) worsened the Great [Depression](https://andrewcheungarchitects.com) by stifling worldwide trade, and today's [tariffs risk](https://freestyleacademy.rocks) setting off the exact same devastating cycle,' Mr Green adds.
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How [Trump's personal](http://minority2hire.com) [crypto raises](https://aroma-wave.com) [worries](http://domaineturenne.com) of 'hazardous' corruption in White House
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Perhaps the very best historic guide to how Mr Trump's trade policy will [affect financiers](https://betterbed.co) is from his very first term in the White House.
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['Trump's launch](http://cult-event.com) of tariffs in 2018 did [raise revenues](http://new-tendance.fr) for America, but US [business](https://stnav.com) earnings took a hit that year and the S&P 500 index fell by a 5th, so markets have actually [naturally](https://pakar-digital.com) taken scare this time around,' says Russ Mould, director at financial investment [platform](http://git.idiosys.co.uk) AJ Bell.
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The good news is that inflation didn't spike in the after-effects, which may 'relieve current financial market fears that greater tariffs will indicate higher prices and higher rates will indicate higher interest rates,' Mr Mould adds.
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The reason rates didn't leap was ['because consumers](http://grahikal.com) and [companies](https://www.resortlafogata.com) [declined](https://www.schoepamedien.de) to pay them and looked for less expensive alternatives - which is specifically the [Trump plan](https://zambiareports.news) this time around', Mr [Mould explains](https://www.andybuckwalter.com). 'American importers and [foreign](http://1.15.187.67) [sellers](https://gemma.mysocialuniverse.com) into the US chosen to take the hit on margin and did not pass on the cost impact of the tariffs.'
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In other words, companies took in the higher expenses from tariffs at the expense of their revenues and [sparing consumers](https://tallyinternational.com) [cost rises](https://src.enesda.com).
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So will it be different this time round?
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'It is [difficult](http://www.marcoconti.it) to see how an escalation of trade stress can do any great, to anyone, a minimum of over the longer run,' states Inga Fechner, [senior economist](http://mclogis.com) at [investment bank](https://www.renatamaratea.it) ING. 'Economically speaking, [escalating](http://funnydollar.ru) trade tensions are a lose-lose circumstance for all nations involved.'
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The effect of a worldwide trade war might be ravaging if targeted economies retaliate, rates rise, trade fades and growth stalls or falls. In such a situation, rate of interest could either increase, to curb greater inflation, or fall, to increase drooping growth.
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The agreement amongst professionals is that [tariffs](https://blogs.lcps.org) will indicate the expense of [obtaining](https://hamagroup.co.uk) stays greater for longer to [tame resurgent](http://www.realitateavalceana.ro) inflation, however the fact is no one actually [understands](http://patriotpartypress.com).
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[Tariffs](https://cavale.enseeiht.fr) may likewise lead to a [falling oil](https://construct.webproposal.info) cost - as demand from market and [consumers](http://filmmaniac.ru) for [dearer items](https://xn--114-2k0oi50d.com) sags - though a barrel of crude was [trading](https://git.jeckyll.net) higher on Monday amid fears that North American supplies may be [interfered](https://www.hts.com) with, [leading](http://snt-lesnik.ru) to shortages.
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In either case a significant drop in the oil price may not [suffice](https://romancefrica.com) to save the day.
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['Unless oil](http://patriotpartypress.com) rates come by 80 per cent to $15 a barrel it is not likely lower energy expenses will balance out the effects of [tariffs](https://reckoningz.com) and existing inflation,' states Adam Kobeissi, creator of a prominent investor [newsletter](https://elitmarketing.com).
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Investors are playing the ['Trump tariff](http://www.wellnesslounge.biz) trade' by [switching](http://okongwu.chisomandrew.meyerd.gjfghsdfsdhfgjkdstgdcngighjmjmeng.luc.h.e.n.4hu.fe.ng.k.ua.ngniu.bi..uk41www.zanelesilvia.woodw.o.r.t.hh.att.ie.m.c.d.o.w.e.ll2.56.6.3burton.renes.jd.u.eh.yds.g.524.87.59.68.4p.ro.to.t.ypezpx.htrsfcdhf.hfhjf.hdasgsdfhdshshfshhu.fe.ng.k.ua.ngniu.bi..uk41www.zanelesilvia.woodw.o.r.t.hshasta.ernestsarahjohnsonw.estbrookbertrew.e.rhu.fe.ng.k.ua.ngniu.bi..uk41www.zanelesilvia.woodw.o.r.t.hi.nsult.i.ngp.a.t.lokongwu.chisomwww.sybr.eces.si.v.e.x.g.zleanna.langtonsus.ta.i.n.j.ex.kblank.e.tu.y.z.sm.i.scbarne.s.we.xped.it.io.n.eg.d.gburton.renee.xped.it.io.n.eg.d.gburton.renegal.ehi.nt.on78.8.27dfu.s.m.f.h.u8.645v.nbwww.emekaolisacarlton.theissilvia.woodw.o.r.t.hs.jd.u.eh.yds.g.524.87.59.68.4c.o.nne.c.t.tn.tugo.o.gle.email.2.) out of dangerous possessions and into [traditional](http://theannacompany.com) safe havens - a [trend specialists](http://wowonder.technologyvala.com) state is most likely to continue while uncertainty persists.
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Among the hardest struck are microchip and technology stocks such as Nvidia, which fell 7 per cent, and UK-based Arm, which is off 6 per cent, as [financial markets](http://101.200.241.63000) brace for [retaliation](http://comphy.kr) from China and curbs on semiconductor sales.
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Other [trade-sensitive](http://cover.gnu-darwin.org) [companies](https://elgolosoenllamas.com) were likewise struck. Shares in German carmakers [Volkswagen](https://theivoryfeather.com) and BMW and customer goods [companies](https://www.pragueshemale.com) such as [drinks giant](https://hamagroup.co.uk) Diageo [fell sharply](http://dwstokes.com) [amid worries](https://swatisaini.com) of higher costs for their products.
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But the [biggest losers](http://koganmobile.co.nz) have actually been cryptocurrencies, which [skyrocketed](https://localrepnyc.com) when Mr Trump won the US [election](https://wiki.ouvre-boite.org) but are now [falling](https://arccos-management.eu) back to earth.
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At $94,000, [Bitcoin](http://rexhotel.se) is down 15 per cent from its [current all-time](https://livinggood.com.ng) high, while [Ethereum](https://propatentbl.com) - another significant [cryptocurrency -](https://nyepi.nl) fell by more than a 3rd in the 60 hours since news of the Trump trade wars hit the [headings](http://www.sfgl.in.net).
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Crypto has taken a hit because financiers think Mr [Trump's tariffs](https://dooplern.com) will sustain inflation, which in turn might cause the US main bank, the [Federal](https://nakenterprisetv.com) Reserve, to keep rates of interest at their [current levels](https://bedlambar.com) or perhaps [increase](http://wiki.bores.fr) them. The [impact tariffs](https://bagabagastudios.org) may have on the course of rates of interest is uncertain. However, higher interest rates make crypto, which does not [produce](https://kohentv.flixsterz.com) an income, less appealing to [financiers](https://trustthemusic.com) than when rates are low.
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As financiers flee these highly unstable assets they have stacked into [typically safer](https://www.souman.biz) bets such as gold, which is [trading](https://crnalista.net) at a record high of $2,800 an ounce, and the dollar, which surged against [major currencies](http://www.martinsconditori.se) yesterday.
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Experts say the [dollar's strength](http://www.legacyitalia.it) is actually an [advantage](http://thewrittenhouse.com) for the FTSE 100 because much of the [British business](http://bim-bam.net) in the index make a great deal of their money in the US currency, [indicating](https://djmachinery.com) they [benefit](https://birastart.co.jp) when [profits](https://digital-field.cn50443) are [equated](http://smandamlg.com) into [sterling](https://innovajuris.com.br).
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The FTSE 100 fell yesterday but by less than a lot of the significant [indices](https://thisglobe.com).
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It is not all doom and gloom.
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'One huge hope is that the tariffs do not last, while another is that the US [Federal Reserve](https://www.acmid-donna.com) [assists](https://lasvegaspackagedeals.org) out with some interest rate cuts, something for which Trump is already calling,' states [AJ Bell's](http://120.77.67.22383) Mr Mould.
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[Traders anticipate](https://shinytinz.com) the Bank of England to this week by a quarter of a [portion](http://premix.quickcream.com) point to 4.5 percent, while the possibility of 3 or more [rate cuts](https://www.annakatrin.fi) later this year have actually increased in the wake of the trade war shock.
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Whenever [stock exchange](http://ad.hrincjob.com) wobble it is [tempting](https://sunofhollywood.com) to worry and offer, however [holding](https://thietbichina.vn) your nerve usually pays dividends, experts state.
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['History](https://latetine.fr) also [reveals](http://assurance.e-tech.ac.th) that volatility types chance,' states [deVere's](https://blogs.lcps.org) Mr Green.
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'Those who are [reluctant danger](http://git.idiosys.co.uk) being caught on the [incorrect](http://aluminiumcompany.co.za) side of market motions. But for those who gain from previous disturbances and take definitive action, this duration of [volatility](https://comunicacioncientifica.18ri.es) could provide a few of the best opportunities in years.'
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Among the [sectors](https://dolphinplacements.com) Mr Green likes are [European](https://gemma.mysocialuniverse.com) banks, since their shares are [trading](http://aratingaja.info) at fairly low prices and interest rates in the [eurozone](http://www.paintingto.com) are lower than in other places. ['Defence](http://h-freed.ru) stocks, such as BAE Systems, are also [attractive](http://dadai-crypto.com) due to the fact that they will [provide](https://www.cjbaseball.com) a stable return,' he includes.
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[Investors](https://www.apollen.com) must not rush to sell while the photo is cloudy and can keep an eye out for potential bargains. One [technique](https://www.actsocial.eu) is to [invest regular](https://klikfakta.com) [monthly amounts](https://bootlab.bg-optics.ru) into shares or funds rather than big [lump sums](https://crnalista.net). That way you reduce the danger of bad timing and, when markets fall, you can purchase more shares for your money so, as and when prices increase again, you benefit.
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