Trump is putting pressure on the US economy with extreme tariffs – risks are rising!

Trump is putting pressure on the US economy with extreme tariffs – risks are rising!

On Liberation Day, President Trump introduced drastic tariffs, which caused noticeable unrest in the financial markets. These new trade measures pose a challenge to the US economy, with the OECD warning of the potential negative consequences. According to a report by Cash Online However, the US labor market is showing remarkable resilience and corporate profits are exceeding expectations. One bright spot is the de-escalation of trade wars, which has allowed risky assets to partially recover while bond yields rose.

Nevertheless, the long-term recovery depends heavily on general economic developments and clarity in trade policy. Pressure at the long end of the yield curve is noticeable, particularly in the US and Japan, where there are high levels of government debt and fiscal problems. Growth forecasts for the USA have been increased; real GDP growth for 2023 and 2026 is now 1.6 percent. The Eurozone is experiencing a similar increase, with forecast growth of 0.8 percent for 2023.

Impact of the new tariffs

However, the new tariff collection represents a significant uncertainty factor. While the forecasts for GDP in 2025 have already been raised from 3.9 percent to 4.3 percent, there are still voices warning of irreversible damage to the economy. The impact of the new tariffs could have a lasting impact on consumer behavior and possible spending cuts by the US government, which are becoming apparent in these difficult times, could also have a negative impact on consumers. Loud Wall Street Online The growth forecast for 2023 was cut to 1.6 percent and for 2026 to 1.5 percent, further increasing concerns about trade conditions.

The trade conflicts and frequent changes in customs regulations are not only putting a strain on the US economy, but are also putting pressure on the global economy. Political uncertainties and protectionist measures have meant that inflation in the USA could soon reach the 4 percent mark again.

Market reactions and strategic adjustments

Financing costs are rising and given this situation, a neutral stance on US duration is recommended. In the Eurozone and Great Britain, however, analysts see positive developments. When it comes to corporate bonds, the aim is to give preference to high-quality, short-term securities in the EU. Market sentiment remains crucial, particularly for US growth stocks, which depend heavily on how trade talks develop.

In conclusion, while the economic outlook is considered solid, overall earnings growth remains positive. Nevertheless, analysts recommend tactical rebalancing and strengthening of hedging strategies in multi-asset portfolios to meet the challenges of the current market situation. Uncertainty over trade policy could further weigh on private sector confidence in the long term.