5 Things Traders May Consider Following Trump’s Tariff Policy

Trump may have suspended his trade tariffs for now, but the markets remain in a state of uncertainty. Afterall, tariffs have merely been paused for 90 days, with no indication of any alteration or backing down. Given the unpredictability of policy shifts, there is a possibility that trade conditions may worsen further. 

What is certain, however, is that the flow of global trade is changing. While it’s difficult to say how things will eventually end up or how long it’ll take to sort itself out, that doesn’t mean investors should sit idly by and do nothing. Instead, traders should take this opportunity to reassess their game plan and re-orientate themselves for great resilience.  

Here’s what traders may consider following Trump’s trade tariffs.  

Re-assess exposure to tariff-sensitive sectors 

The tariffs that Trump has enacted globally are not applied equally, with countries such as China, Canada and Mexico being more heavily taxed.  

This means that sectors that are heavily reliant on supply chains originating or connected to territories slapped with higher tariff rates are likely to be more heavily impacted.  

Some examples of such sectors include ^[1]:  

• Chinese re-retailers 

• Automotive firms 

• Semiconductor and chips  

• US consumer goods 

• Basic materials and industrials  

Traders may wish to review their exposure to sectors more directly affected by trade tariffs, and explore whether reallocating to less-exposed areas aligns with their risk management strategy. This may not be a one-time exercise, given that the situation remains in flux, with countries scrambling to work out trade deals that may moderate the overall impact of the tariffs.  

Monitor safe-haven assets such as gold  

It’s important to realise that the immediate effect of Trump’s trade tariffs—if enacted as planned—would be a massive global economic slowdown. This would throw all bets out the window, even traditionally safe ones such as gold. 

This means that investors should monitor even safe-haven assets closely, as they could also be impacted by changing economic factors.  

Let’s take gold as an example. While the shiny metal has indeed performed well during market uncertainty – including during the latest market rout brought on by tariff panic – there have also been instances where it failed.  

Essentially, gold is sensitive to interest rate decisions and can fade in appeal when interest rates rise (this is when bonds become more attractive, as gold doesn’t offer a yield).  

One effect of Trump’s tariffs is raising US consumers’ prices as imported goods become more expensive. Another term for rising prices is inflation, and if inflation once again goes too high, the US Federal Reserve will likely respond by raising interest rates.  

This could cause gold to falter as a safe-haven asset as investors flock to bonds seeking risk-free returns.  

The takeaway here is to monitor everything and take nothing for granted. Spotting signs of declines early in your safe-haven holdings will give you a better chance to respond.  

Stay updated on tariff announcements 

Besides watching the markets, it might be prudent to add a few more news outlets to your regular reading list.  

Firstly, the ongoing trade war between the US and China should be top of mind for any investors, given the potential to further wreck havoc on global markets. There’s just no telling how far things will go before the two largest economies in the world come to an agreement.  

Secondly, let’s not forget that governments across the world are working out trade deals with Trump’s administration to lessen the impact of the tariffs. Any new trade deals inked could provide vital clues towards future market conditions.  

Look for opportunities in non-impacted markets 

Trump’s administration has implemented tariff exemptions for selected sectors, illustrating how targeted policy measures can shield specific industries from broader trade-related disruptions. 

One such sector is the tech sector, which has enjoyed a 100% exemption from reciprocal tariffs. Spanning electronic devices and their key components, this means that many popular US gadgets such as smartphones, computers and semiconductors will continue to enjoy price stability in the short-term. This exemption may support price stability in the short term for affected companies, though performance is not guaranteed.  

Besides electronics and semiconductors, other important sectors have also been granted exemptions ^[2]: 

• Petroleum products and coal derivatives 

• Copper 

• Energy raw materials 

• Raw wood, sawn wood, and wood-based sheets and panels 

• Pharmaceuticals, including basic materials 

• Metals and minerals 

Diversify across regions and asset classes  

Lastly, traders may also consider diversifying their holdings away from the US economy, or popular sub-sectors such as tech or oil & gas.  

For decades, the US has been regarded as the best place to invest, whether for its equities, bonds or currencies. This perception has been challenged amid recent US policy changes, which have introduced increased market uncertainty. There is even mistrust around the announced tariff exemptions, with investors fearing they may prove short-lived.  

With confidence in the US economy shaken by current events, increasing numbers of investors are considering the “sell America trade” ^[3]. This is exactly as it sounds – selling off US assets in favour of markets that offer greater stability and certainty.  

To wit: At the height of trade tensions, US equities fell, the US Dollar weakened, and even traditionally stable assets like US government bonds were sold off. This reflected a temporary shift in investor sentiment. Past performance is not indicative of future results. 

Furthermore, major currencies including AUD, EUR and GBP surged against USD, demonstrating a lack of confidence in the US economy.  

The “sell America trade” emergence reflects a broader shift in market sentiment, where investors reduce exposure to US assets amid concerns over economic and policy instability. Additionally, diversifying your portfolio away from America and towards other markets can help traders discover new markets with considerable trading potential.  

Explore our article, Looking Beyond the US: Asia and Emerging Markets in Focus, to understand how regional diversification can help navigate shifting market dynamics and uncover new opportunities. 

Final Thoughts: Navigating Uncertainty in a Shifting Trade Landscape 

Trump’s tariff policy has introduced a new wave of uncertainty into global financial markets, challenging long-held assumptions about safe-haven assets, sector resilience, and US market dominance. While the full impact of these trade measures will unfold over time, the current environment underscores the importance of proactive portfolio management. 

Stay informed of market shifts with Vantage. Access expert insights, real-time updates, and trading tools designed to support your trading decisions. Open a live account to explore our platform. 

Frequently Asked Questions 

What are Trump’s tariffs? 

Following his re-election, President Trump implemented trade tariffs on goods imported into the US, initially setting a base rate of 10%. Some countries, such as China, Mexico and Canada, were hit subject to higher tariff rates.  

At the time of writing, China faced the highest tariff rate, up to 245%.  

Why are the reasons for the tariffs? 

The tariffs were introduced as part of an effort to address perceived trade imbalances. The goal was to encourage fairer trade terms, increase foreign investment, and bring jobs that had been offshored back home to American soil.  

Did Trump pause Tariffs? 

On 9 April, President Trump announced a 90-day pause on all reciprocal tariffs launched the day before. This was for all countries except China, which had responded by raising tariffs of their own.  

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