Strategists at UBS predict that President Trump’s tariff policy is unlikely to trigger a recession or halt the current equity bull market, despite recent escalations in trade disputes.
“Our base case remains that US tariffs will eventually settle around 15%,” Ulrike Hoffmann-Burchardi, UBS Global Wealth Management’s chief investment officer for the Americas, wrote in a note on Monday. “While this would be the highest since the 1930s, and six times higher than when Trump took office, we do not expect it to cause a recession or end the equity bull market.”
This assessment follows several significant trade actions. On Friday, Trump signed an order to raise tariffs on Canadian imports to 35%, while affirming a 10% minimum tariff rate across all trading partners, with the new duties scheduled for implementation this week. These moves come alongside a recent 90-day suspension of threatened tariffs on Mexico and proposed 15% tariffs on goods from the European Union.
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