Key Takeaways:
- Trump’s tariff policies have surpassed expectations, introducing a 10% base levy, reciprocal tariffs of up to 49%, and a confirmed 25% tariff on car imports.
- These tariffs are causing significant disruptions to the free trade model and contributing to the depreciation of the USD.
- In addition to the risk of persistent inflation, the more significant impact will be on economic growth and corporate earnings.
- Europe could emerge as a beneficiary in the ongoing trade conflict with the US: the room for fiscal and monetary policy accommodation, diverse trade partnerships, and appealing market valuations position it as an attractive investment opportunity in both equity and fixed income.
- In fixed income, we maintain a flexible strategy regarding duration and prefer European investment-grade securities over those in the US, with a particular emphasis on banks.
- In equity markets, Europe is currently more reasonably priced relative to the US, with opportunities in European small-cap stocks and a strong focus on selecting companies with well-diversified supply chains and lower exposure to the trade war.
- Investors should focus on diversification*, tactical duration strategies, and hedges like gold to create resilient portfolios and take advantage of opportunities that may emerge during this volatile market period.
In our recent discussion focused on "What’s Next for Europe and the World: Recent Market Developments Unpacked", our experts Monica Defend, Head of Amundi Investment Institute & Chief Strategist, Amaury D'Orsay, Head of Fixed Income, and Barry Glavin, Head of Equity, provided an initial assessment of recent trade tariffs and their implications for the global economy and markets, with a special focus on Europe.
Read our article on Liberation Day tariffs
* Diversification does not guarantee a profit or protect against a loss
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 9 April 2025. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results.
Date of first use: 9 April 2025
Doc ID: 4389091