Market Commentary The Trump Dump

Market Commentary – April 7, 2025

Equity markets around the world fell sharply last week after President Trump released his “Liberation Day” tariff plan – and it was much worse than expected.

China has already retaliated, announcing reciprocal tariffs on the United States. Fears have emerged not only of a U.S. economic slowdown, but also of a heightened risk of recession. There are also fears that inflation will rear its ugly head, driving prices of goods and services higher again. The Financial Times on April 5 summed up the situation quite well in our view: “The U.S. president’s liberation day has triggered a big market sell-off, amid fears of a return to Depression-era tariff barriers and confusion about what exactly he is trying to achieve.” Uncertainty is never the markets’ friend because markets don’t know how to price uncertainty.

We certainly understand investors’ fears and concerns, so we want to address what the fallout from Trump’s tariffs could mean. First, we must keep in mind that this is a fluid situation with many twists and turns that can still change expected outcomes. But reviewing the current data, we believe President Trump is primarily focused on China, who he believes is a considerable threat to the U.S