Investing Insights Market Volatility: What Lies Ahead in Trump's Trade War
Apr 11, 2025
Dominic Pappalardo, Chief Multi-Asset Strategist at Morningstar Investment Management, tackles the U.S.-China trade war's impact on global markets. He outlines the implications of Trump’s 90-day tariff pause and rising recession risks. Pappalardo discusses why fixed income and equities react differently to market turmoil and offers strategies to safeguard retirement portfolios amid volatility. He also shares insights on potential Federal Reserve interest rate cuts and what investors should keep on their radar for future market movements.
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US-China Trade War Focus
- The White House views the trade war as a direct conflict with China more than with any other country.
- Canada and Mexico are important due to proximity, but China is the main concern regarding trade regulation.
Tariff Implementation Impact
- While taxing foreign products might eventually boost US manufacturing, realizing those benefits takes time.
- The immediate implementation of tariffs, without sufficient notice, caused market turmoil.
Tariff Pause and China
- The 90-day tariff pause signals potential flexibility in the terms of the initial announcement.
- China's exclusion from the pause reinforces the focus on the US trade imbalance with China.