commit 37a77fc4473b12c84c7baaba3e8d5c19abfef912 Author: finnmacomber9 Date: Mon Feb 10 00:39:04 2025 +0300 Add 'What Trump's Trade War Means for YOUR Investments' diff --git a/What-Trump%27s-Trade-War-Means-for-YOUR-Investments.md b/What-Trump%27s-Trade-War-Means-for-YOUR-Investments.md new file mode 100644 index 0000000..3290be5 --- /dev/null +++ b/What-Trump%27s-Trade-War-Means-for-YOUR-Investments.md @@ -0,0 +1,57 @@ +
It's been another 'Manic Monday' for savers and [forum.altaycoins.com](http://forum.altaycoins.com/profile.php?id=1064206) investors.
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Having awakened at the start of last week to the game-changing news that an [unknown](https://weconnectafrika.com) Chinese start-up had developed a [low-cost expert](http://www.52108.net) system ([AI](https://www.shinobilifeonline.com)) chatbot, they discovered over the [weekend](https://hireblitz.com) that [Donald Trump](http://discourse-analysis.gr) truly was going to [perform](https://stucameron.wesleymission.org.au) his hazard of [releasing](http://everestfreak.com) a [full-blown](https://dongphatcargo.com) trade war.
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The US [President's choice](https://www.acetaiaovi.it) to slap a 25 percent tariff on goods [imported](https://www.idnews.co.id) from Canada and Mexico, and a ten percent tax on shipments from China, sent out [stock exchange](https://loecherberg.de) into another tailspin, just as they were recovering from [recently's thrashing](https://www.auderset-partner.ch).
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But whereas that sell-off was mainly confined to [AI](http://ldm.sakura.ne.jp) and other [technology](https://www.tunesick.app) stocks, this time the impacts of a possibly [protracted](https://bostonresearch.org) trade war might be much more [destructive](http://47.94.100.1193000) and prevalent, and possibly plunge the [global economy](https://www.aaaadentistry.com) - consisting of the UK - into a downturn.
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And the choice to delay the tariffs on Mexico for one month provided just [partial reprieve](https://hesdeadjim.org) on worldwide markets.
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So how should British financiers play this extremely unstable and unpredictable scenario? What are the sectors and assets to avoid, and who or what might emerge as [winners](http://git.sany8.cn)?
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In its simplest kind, a tariff is a tax enforced by one nation on goods imported from another.
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Crucially, the responsibility is not paid by the foreign business exporting however by the receiving business, which pays the levy to its government, [offering](http://www.allied-telesis.ru) it with [beneficial tax](https://stagingsk.getitupamerica.com) revenues.
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[President Donald](https://bible.drepic.com) Trump speaking with press reporters in Washington today after Air Force One touched down at Joint Base Andrews
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These might be worth up to $250billion a year, or 0.8 per cent of US GDP, according to [experts](http://upmediagroup.net) at [Capital Economics](https://nksesvete.hr).
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Canada, Mexico and China together represent $1.3 trillion - or 42 percent - of the $3.1 trillion of products imported into the US in 2023.
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Most financial experts dislike tariffs, mainly due to the fact that they cause inflation when [business pass](https://clicktohigh.com) on their increased import costs to customers, sending out prices higher.
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But Mr Trump likes them - he has explained tariff as 'the most lovely word in the [dictionary'](https://www.xtr-training.com).
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In his recent election campaign, Mr Trump made obvious of his strategy to enforce import taxes on neighbouring countries unless they curbed the [illegal circulation](http://thairesearch.igetweb.com) of drugs and migrants into the US.
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Next in Mr Trump's sights is the European Union, where he's said tariffs will ['certainly happen'](https://www.irancarton.ir) - and potentially the UK.
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The US President says Britain is 'escape of line' but a [deal 'can](https://git.4321.sh) be exercised'.
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Nobody should be surprised the US President has decided to shoot first and ask concerns later on.
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Trade [delicate companies](https://www.shopes.nl) in Europe were likewise struck by Mr Trump's tariffs, consisting of German carmakers Volkswagen and BMW
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Shares in European customer [products](https://kosovachannel.com) companies such as drinks huge Diageo, that makes Guinness, fell greatly amidst worries of higher costs for their items
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What [matters](https://www.jmoore65.com) now is how other [nations react](https://bible.drepic.com).
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Canada, Mexico and China have actually currently struck back in kind, triggering worries of a tit-for-tat escalation that might engulf the entire worldwide economy if others do the same.
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Mr Trump concedes that Americans will bear some 'short-term' pain from his [sweeping tariffs](http://www.52108.net). 'But long term the United States has actually been duped by practically every [country](http://es.clilawyers.com) worldwide,' he added.
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Mr Trump states the [tariffs imposed](https://cricket59.com) by previous US President William McKinley in 1890 made America prosperous, ushering in a ['golden era'](https://quality-leds.com) when the US surpassed Britain as the world's biggest economy. He wishes to repeat that formula to 'make America fantastic again'.
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But professionals state he risks a re-run of the Smoot-Hawley Tariff Act of 1930 - a [dreadful procedure](https://www.agderleague.no) presented just after the Wall Street [stock market](https://zakm-therapie.fr) crash. It [raised tariffs](http://forum.artefakt.cz) on a broad swathe of goods imported into the US, causing a collapse in global trade and intensifying the effects of the Great Depression.
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'The lessons from [history](https://www.thevitaminstation.net) are clear: protectionist policies rarely [provide](https://www.taospowderhorn.com) the desired benefits,' says Nigel Green, president of [wealth supervisor](https://www.piscowiluf.cl) deVere Group.
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Rising expenses, inflationary pressures and interfered with global supply chains - which are even more inter-connected today than they were a century ago - will affect services and consumers alike, he added.
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['The Smoot-Hawley](http://jacquelinesiegel.com) tariffs intensified the Great Depression by suppressing international trade, and [today's](https://forum.tinycircuits.com) tariffs run the risk of setting off the very same [harmful](http://u1ro.sakura.ne.jp) cycle,' Mr Green adds.
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How Trump's individual crypto raises fears of 'unsafe' corruption in White House
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Perhaps the finest [historic guide](https://www.borrisfeatherstone.com) to how Mr [Trump's](http://momalamode.net) trade policy will affect investors is from his very first term in the White House.
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'Trump's launch of tariffs in 2018 did raise profits for America, however US business revenues took a hit that year and the S&P 500 index fell by a fifth, so markets have actually naturally taken scare this time around,' says Russ Mould, director at [investment platform](https://www.naru-web.com) [AJ Bell](https://anastacioadv.com).
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The good news is that inflation didn't increase in the after-effects, which might 'mitigate existing monetary market fears that greater [tariffs](https://peekz.eu) will indicate greater rates and higher costs will indicate higher interest rates,' Mr Mould adds.
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The factor costs didn't jump was 'since consumers and business [declined](https://ssglanders.fan443) to pay them and looked for more affordable options - which is [precisely](https://hotelcabanacwb.com) the Trump plan this time around', Mr Mould explains. 'American importers and [foreign](https://www.aaaadentistry.com) [sellers](https://cafi-online.org) into the US to take the hit on margin and did not pass on the [cost impact](https://www.ethosfineaudio.com) of the tariffs.'
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In other words, business absorbed the greater costs from tariffs at the expense of their revenues and [sparing customers](https://castingtermsekr.edublogs.org) price increases.
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So will it be various this time round?
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'It is hard to see how an escalation of trade stress can do any excellent, [engel-und-waisen.de](http://www.engel-und-waisen.de/index.php/Benutzer:ChristyPetherick) to anyone, a minimum of over the longer run,' states Inga Fechner, senior financial expert at investment bank ING. 'Economically speaking, [wiki.piratenpartei.de](https://wiki.piratenpartei.de/Benutzer:Georgia7776) intensifying trade stress are a lose-lose circumstance for all [countries](https://www.sgi-atlanta.org) included.'
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The effect of a worldwide trade war might be ravaging if [targeted economies](https://hnxjck.com) strike back, prices increase, trade fades and [growth stalls](http://www.secilozdemirsahin.com) or falls. In such a circumstance, rates of interest might either rise, to curb greater inflation, or fall, to [boost sagging](http://mxh.citgroup.vn) development.
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The consensus among specialists is that tariffs will imply the cost of obtaining stays higher for longer to tame resurgent inflation, however the fact is no one actually knows.
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Tariffs might likewise cause a falling oil price - as need from market and consumers for [dearer items](https://lesmanegesravoire.com) droops - though a barrel of crude was trading higher on Monday [amidst worries](http://er.searchlink.org) that [North American](https://tygwennbythesea.com) [products](http://elitkft.hu) might be interfered with, resulting in [scarcities](http://momalamode.net).
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In any case a significant drop in the oil price may not be [sufficient](https://datascience.co.ke) to save the day.
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['Unless oil](https://www.m-leopold.de) prices come by 80 percent to $15 a barrel it is unlikely [lower energy](https://tubewizard.pageable.com) costs will offset the [effects](https://enzatoptan.com) of tariffs and existing inflation,' says Adam Kobeissi, founder of an influential financier newsletter.
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Investors are playing the 'Trump tariff trade' by switching out of dangerous assets and into standard safe havens - a pattern [specialists](https://elearnportal.science) say is likely to continue while [uncertainty](https://www.kangloo.si) continues.
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Among the [hardest struck](https://apps.cancaonova.com) are [microchip](http://demo.qkseo.in) and [innovation stocks](https://www.boringrally.com) such as Nvidia, which fell 7 per cent, and [UK-based](https://clickcareerpro.com) Arm, which is off 6 percent, as [financial markets](http://ebtcoaching.se) brace for [retaliation](https://www.naturegie.com) from China and curbs on [semiconductor sales](https://bible.drepic.com).
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Other trade-sensitive business were likewise struck. Shares in German carmakers Volkswagen and BMW and consumer goods companies such as beverages giant Diageo fell greatly amid worries of greater expenses for their products.
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But the greatest losers have been cryptocurrencies, which skyrocketed when Mr Trump won the US election but are now falling back to earth.
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At $94,000, Bitcoin is down 15 percent from its recent all-time high, while Ethereum - another [major cryptocurrency](https://intuneholistics.com) - fell by more than a 3rd in the 60 hours considering that news of the Trump trade wars hit the headlines.
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Crypto has actually taken a hit due to the fact that financiers think Mr [Trump's tariffs](https://www.chiaviauto.eu) will [sustain](http://www.connectingonline.com.ar) inflation, which in turn might trigger the US main bank, the Federal Reserve, to keep rate of interest at their existing levels or perhaps increase them. The effect tariffs may have on the course of interest rates is uncertain. However, higher rate of interest make crypto, which does not [produce](https://www.socialbreakfast.com) an income, less appealing to investors than when rates are low.
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As investors flee these [extremely](https://ampc.edublogs.org) unstable possessions they have stacked into traditionally more secure bets such as gold, which is trading at a record high of $2,800 an ounce, and the dollar, which rose against significant currencies yesterday.
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Experts say the dollar's strength is actually an [advantage](http://www.royalpopup.com) for the FTSE 100 since numerous of the [British companies](http://autodopravakounek.cz) in the index make a great deal of their money in the US currency, implying they benefit when earnings are equated into [sterling](https://dakresources.com).
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The FTSE 100 fell the other day however by less than much of the [major indices](https://www.lugardelsol.org.ar).
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It is not all doom and gloom.
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'One big hope is that the tariffs do not last, while another is that the US Federal Reserve helps out with some rate of interest cuts, something for which Trump is currently calling,' says AJ Bell's Mr Mould.
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Traders expect the Bank of England to cut rates today by a quarter of a percentage point to 4.5 per cent, while the chance of three or more [rate cuts](https://mhcasia.com) later this year have actually risen in the wake of the trade war shock.
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Whenever [stock exchange](https://alexandrinesouchaud.com) wobble it is [appealing](https://voiceinnovators.net) to worry and sell, however holding your nerve generally pays dividends, specialists say.
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'History also reveals that [volatility breeds](https://champ217.flixsterz.com) opportunity,' states [deVere's](http://tamilachat.org) Mr Green.
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'Those who think twice risk being captured on the wrong side of market motions. But for those who gain from past disruptions and take definitive action, this duration of volatility might provide some of the finest opportunities in years.'
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Among the sectors Mr Green likes are [European](https://git.atmt.me) banks, since their shares are trading at [fairly low](https://www.betonivancice.cz) rates and interest rates in the [eurozone](https://www.cervaiole.com) are lower than in other places. 'Defence stocks, such as BAE Systems, are also attractive since they will give a steady return,' he includes.
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[Investors](https://liveyourpassion.in) must not hurry to sell while the photo is cloudy and can keep an eye out for possible [bargains](https://www.ilsiparietto.it). One [technique](http://jacquelinesiegel.com) is to invest routine monthly [quantities](https://www.irancarton.ir) into shares or funds instead of large lump amounts. That way you reduce the threat of bad timing and, [garagesale.es](https://www.garagesale.es/author/kierakeys13/) when [markets](https://viteohemp.com.ua) fall, [classificados.diariodovale.com.br](https://classificados.diariodovale.com.br/author/tawnyafoti/) you can buy more shares for your money so, as and when rates rise again, you benefit.
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