By Raj Singh
Portfolio Manager, Multi-Asset

Trade policy uncertainty is anticipated to remain high despite recently announced trade deals, with Trump administration utilizing tariffs as a negotiation tactic. This ongoing "tariff noise" will likely become a fixture in the economic landscape. While the impact of tariffs on China is projected to be mild, tariffs is likely to affect Mexico and Canada significantly. In Europe, tariffs are likely to stabilize around 15% based upon the latest trade deal announced but will also be influenced by sector-specific tariffs.

• The global growth outlook has stabilized amid shifting trade dynamics
  Global economic resilience is emerging despite recent macro, policy, and geopolitical shocks, while investor focus has shifted away from U.S. dominance toward a more balanced global outlook.
• U.S. tariff threats have receded but will leave a bad taste on growth, the labor market, and inflation

By Raj Singh
Portfolio Manager, Multi-Asset

By Raj Singh
Portfolio Manager, Multi-Asset

The recent developments on trade front especially tariff truce between US and China marks a significant, albeit temporary, de-escalation in trade tensions, reducing recession risks and stabilizing near-term investor sentiment. This development has recently boosted risk assets as recession fears ease, leading to surges in both U.S. and Asian markets. The positive news is also lifting European markets, while U.S. Treasury yields have risen as investors shift away from safe-haven assets.

By Raj Singh
Portfolio Manager, Multi-Asset

After several years of solid growth, the global economy is confronting a new policy-driven shock. The swift and stringent trade policies introduced by the new U.S. administration pose one of the most formidable challenges, threatening the established norms of global free trade and the dominance of the U.S. dollar. This negative shock is intensified by heightened uncertainty, stemming from the rapid-fire policy announcements from the U.S., which are reverberating across the global economic landscape.

• The global economy confronts upheaval as the U.S. looks to restructure international trade.
  U.S. import tariffs have weakened the U.S. economy, while global economies sought to shore up their foundations to withstand the crosscurrents. Uncertainty is extraordinarily elevated and unlikely to clear immediately.
• U.S. recession odds have spiked. Growth boosting policy measures are required to avoid recession.

By Raj Singh
Portfolio Manager, Multi-Asset

By Raj Singh
Portfolio Manager, Multi-Asset

By Raj Singh
Portfolio Manager, Multi-Asset

• A complex global picture is emerging, with significant divergence in growth and policy actions.
  While the U.S. continues to thrive, China and Europe are struggling. Proposed U.S. import tariffs threaten to intensify these diverging fortunes, reinforcing the U.S. exceptionalism theme. Policymakers will need to respond accordingly.
• The U.S. economy remains resilient, but with pockets of weakness requiring careful watch.