The Global Trade War and Its Background
The trade war ignited by US President Donald Trump has led to significant tensions in global markets. In April 2025, the US government announced high import tariffs on goods from countries with which the USA has a trade deficit. These tariffs are set to come into effect in July 2025.
Affected countries responded by announcing counter-tariffs on US goods, which further escalated the trade conflicts.
Impact on the Stock Market
Price Declines Due to Uncertainty
Following the announcement of the tariffs, there was a worldwide decline in stock prices. Many stocks, particularly those commonly found in hedge fund portfolios, lost an average of more than seven percent in value. However, there are exceptions, such as the stock of Maplebear (Instacart), which has been in the plus since early April.
Economic Consequences
The introduction of tariffs raises concerns about inflation, as higher import costs could be passed on to consumers. Additionally, fears of recession are increasing because trade conflicts often lead to economic downturns. Moreover, long-term interest rates in the USA and the Eurozone could rise, increasing the debt burden.
Strategies for Investors
The market uncertainty forces many investors to rethink their strategies. Especially in the German-speaking region, investors need to adjust their portfolios to protect against the risks of the trade war. This also includes investing in less trade-sensitive sectors.
Overall, the stock market remains under pressure, and investors must prepare for a more volatile market landscape.