The market environment has shifted dramatically since the beginning of 2025. The combination of erratic policymaking, particularly concerning tariffs, has left investors uneasy during the initial weeks of the Trump Administration. The latest wave of trade policy uncertainty culminated on April 2, when President Trump announced a minimum 10% tariff on all exports to the U.S., with some countries facing additional tariffs exceeding 40%. Several of the countries have responded – or are expected to respond – with tariffs of their own on U.S. goods, compounding the economic impact.

Navigating the current economic landscape

Predicting the severity of the current economic downturn is challenging. However, there are reasons to believe that growth will remain resilient, albeit weaker, and that any recession may be shallow. Key factors to monitor include:

• Potential reductions in tariff rates as negotiations progress.
• The Federal Reserve’s possible resumption of policy rate cuts to mitigate or shorten a recession.
• The introduction of growth-friendly measures, such as tax cuts and deregulation.

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