Gold prices slip lower; consolidating after recent gains
Investing.com -- The latest wave of tariffs introduced by the Trump administration is causing ripples in global trade, reshaping supply chains, and prompting investors to reconsider their strategies. This observation comes from Nigel Green, CEO of deVere Group, a leading independent financial advisory and asset management organization. Share values in Europe and Asia have dropped following US President Donald Trump’s tariff announcements on Canada, Mexico and China, along with a confirmation that tariffs on the EU are imminent.
The situation echoes past protectionist policies, such as the Smoot-Hawley Tariff Act of 1930. Implemented to protect American industries during the Great Depression, the Act led to retaliatory measures that cut US exports by over 60% and exacerbated the global recession. Today, major economies are responding to Washington’s aggressive trade stance, and similar risks are emerging.
According to Green, history has shown that protectionist policies seldom yield the expected benefits. The Smoot-Hawley tariffs amplified the Great Depression by stifling global trade, and the current tariffs could set off the same destructive cycle. The resulting rise in costs, inflationary pressures, and disrupted supply chains will affect businesses and consumers. Green also noted that volatility can create opportunities for investors who understand these cycles and position themselves strategically.
North American, European, and Asian stock markets have already reacted to the tariffs, with significant sell-offs in trade-sensitive sectors. Tech firms, automakers, and consumer goods companies are adjusting to new cost pressures. The bond market is also showing signs of concern, with short-term yields rising and longer-term rates falling, indicating worries about economic expansion.
Green further noted that the effects of the tariffs are resonating across asset classes. Equity markets are under pressure, safe-haven investments are seeing inflows, and currency markets are adjusting. The last time such extensive tariff impositions occurred, global trade experienced a historic contraction. Investors who understand the wider implications will be best positioned to protect and grow their portfolios.
Commodities have also been affected. Oil prices have risen due to concerns about trade disruptions involving North American energy producers. Agricultural markets are preparing for turbulence as China and the European Union retaliate with their own tariffs, targeting US exports.
Cryptocurrencies, often considered an alternative during economic instability, have also experienced significant volatility. Bitcoin and Ethereum have seen major declines before stabilizing, reflecting wider market unease.
With Canada and Mexico announcing countermeasures and China promising additional actions, uncertainty is expected to continue. Trade-dependent industries are now reassessing sourcing strategies, while investors are considering how prolonged tensions could alter global capital flows.
Green concluded by advising investors not to hesitate, as they risk being caught on the wrong side of market movements. For those who learn from past disruptions and act decisively, this period of volatility could offer some of the best opportunities in years.
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