Following the tariffs imposed by the US Government this week, global markets have taken a sharp downturn. Investors have been reacting to escalating trade tensions, as the uncertainty they bring has brought about volatility in the markets.
It’s important to understand the factors driving this volatility and how long-term investment strategies should adapt in response.
What has been happening?
Last week, US President Donald Trump announced a new set of tariffs on imports from all countries, including the UK. These are the basic elements of the plan:
A 10% baseline tariff went into effect on 5 April 2025. It is the companies that bring foreign goods into the US that have to pay the tax to the government.
11 countries face the basic rate including the United Kingdom, Singapore, New Zealand, Australia, Turkey and Brazil. Other countries have not been so fortunate and have significantly higher tariffs applied: EU 20%, China 54%, Vietnam 46%.
These tariffs have been dubbed “Liberation Day Tariffs” by the US administration and have taken analysts by surprise as they did not expect them to be so aggressive and wide-reaching. Response from global markets has been quick and severe with stock markets dropping and even gold has seen outflows as investors rush to cash.
What does this mean for your investments?
As of 8th April, the UK has not announced any retaliation in terms of US products leaping in price.
US shares that UK investors currently hold either directly or through funds may have already seen a fall in the value of US investments. Further falls may reduce the value of investments you hold, however, if you can hold off before cashing them in – the markets will have a chance to recover.
If you’re contributing to a regular investment plan that invests in a fund, the money you’re putting in now, while the market is down, will buy more units of that fund. This means that if and when the market recovers, those monthly investments could be worth more than if you’d invested when the market was high.
How we are responding for you.
We remain fully committed to your investments and will continue to closely monitor your portfolio’s performance as usual. We’ll stay in regular contact with fund managers and economists and will be ready to make any necessary adjustments to help safeguard your financial goals.
If you would like to talk to one of our professional advisers about how the US tariffs might be affecting your portfolio, please get in touch to book an appointment – info@janenewmanfp.co.uk and 01905 779193
The value of investments can fall as well as rise. You may not get back what you invest.’
‘The Financial Conduct Authority does not regulate tax advice.’