Market Disruption Triggered by New US Tariffs
🧾 Executive Summary: WeekWatch – 7 April 2025 | St. James’s Place
Market Disruption Triggered by New US Tariffs
President Trump announced sweeping new tariffs on nearly all US imports, marking the most significant tax hike in 40 years. Effective 9 April, these tariffs will include a wide range of goods and products, specifically targeting various sectors of the economy. The measures are anticipated to have far-reaching implications for international trade relations and domestic industries, aiming to bolster American manufacturing and reduce the trade deficit.
US Tariffs at a Glance;
10% minimum on most imports
20% on EU goods
24% on Japanese goods
An additional 34% on Chinese imports
These abrupt moves have sparked fears of a global trade war and significant economic disruption.
Markets React Sharply
Markets globally sold off in response to the announcement:
S&P 500: -9.05%
NASDAQ: -10.0%
FTSE 100: -6.97%
MSCI Europe ex-UK: -6.95%
Nikkei 225: -6.01%
Uncertainty remains high as key trading partners consider retaliation, including China, which has already announced reciprocal tariffs.
Investor Guidance from SJP
Market volatility is not unusual, and sharp pullbacks are part of long-term investing.
Selling during periods of volatility often leads to poor long-term outcomes.
Maintaining diversified, resilient portfolios and avoiding emotional decisions is critical.
SJP portfolios remain positioned with discipline, process, and long-term strategy at the core.
Economic Implications
Tariffs are expected to result in:
Higher consumer prices in the US
Reduced economic growth
Increased inflation
Rising unemployment
Potential stagflation scenario
Markets are now pricing in three additional Federal Reserve rate cuts in 2025.
SJP Insights
Justin Onuekwusi, CIO, urges investors to remain calm, highlighting the importance of process and resilience in times of uncertainty.
Hetal Mehta, Head of Economic Research, notes that US consumers will ultimately bear the costs of the tariffs, and the ripple effects will take time to filter through global supply chains.
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