Global Equities Investors Gird for Trump’s Next Tariff Body Blow (2025)

Global Equities Investors Gird for Trump’s Next Tariff Body Blow

Esha Dey

Sun, Mar 30, 2025, 8:00 AM 6 min read

(Bloomberg) — President Donald Trump says he’s looking forward to April 2. Global equities investors, not so much.

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The administration is expected to unveil a broad slate of so-called reciprocal tariffs against US trading partners on Wednesday, and it’s looming as the next potential body blow for markets.

The president has said the levies will be “lenient,” but money managers are on guard given the lack of specifics around what the next package of tariffs may include. In a hint of the potential volatility ahead, last week’s announcement of auto tariffs rattled shares in the industry worldwide.

Depending on the scale of what’s announced, Bloomberg Economics sees scope for a hit to US GDP and a jolt to prices over the coming years, given the possibility of massive tariff hikes on imports from some countries. A Goldman Sachs Group Inc. index of stocks that thrive during stagflation — a time of low growth and high inflation — has been soaring.

“Everything is at stake, everything,” said Mark Malek, chief investment officer at Siebert. “Inflation is on the rise, consumption is showing signs of weakness, consumer sentiment is slipping, all stemming from the administration’s tariff policy.”

April 2 should set the tone for the next few months in markets, Barclays Plc strategists said last week. A wide-ranging set of steep tariffs bodes poorly for risk assets as the second quarter gets underway, they wrote in a report. But with big enough exemptions or a delay, investors should get ready for “a relief rally.”

There’s also the threat of retaliation from US trading partners that boosts volatility, said Solita Marcelli, chief investment officer at UBS’s American wealth management arm.

In preparation for it all, traders have been exiting segments that may get caught in the crosshairs. Baskets that follow shares most at risk have plunged this year, significantly trailing broader indexes in the US and Europe.

Following is a breakdown of sectors and stocks to watch by region:

US

The auto industry — including carmakers, parts suppliers and dealers — remains at the center of the tariff-related turmoil, especially after the 25% levies announced last week. General Motors Co. is expected to face sharply higher costs, and while Ford Motor Co. produces a larger share of its US sales domestically than its Detroit peers, it won’t be spared. An index of automakers and components has sunk 34% since Trump took office.