SUMMARY OF QUARTERLY ECONOMIC AND INVESTMENT UPDATE CONFERENCE CALL

The content of the call provided an in-depth economic and market update against a backdrop of escalating geopolitical tensions and a radical shift in US trade policy under President Trump’s administration.  There was an analysis of the material changes in US foreign and economic policy; the new Trump administration has adopted an isolationist and protectionist stance, rolling back decades of post-WWII trade liberalisation and casting uncertainty over NATO’s future.  The major economic shift has been the imposition of sweeping tariffs, with Trump signalling a return to 1920s-style nationalism and protectionism.  While “reciprocal” tariffs on many countries have been paused for 90 days, a baseline 10% tariff on all US imports remains, with much steeper tariffs on others—particularly China, which now faces tariffs of up to 125%.  Markets have reacted with material volatility.

The potentially severe consequences of the new tariffs were discussed.  The Trump administration’s approach is driven by a belief in “America First” and “reciprocity,” with retaliation against countries perceived to disadvantage the US. The 2 April 2025 tariff package is the most significant move toward protectionism in nearly a century, affecting 57 countries.  Economists warn that tariffs, which act like consumer taxes, reducing consumer purchasing power, as well as business confidence, could depress global GDP by up to 3% if sustained.  In the UK, tariffs have been less severe (10% baseline), and the UK has chosen not to retaliate—beneficial economically, though politically cautious.  However, the UK still faces a fragile growth outlook and could see a mild recession.  In response, central banks will likely have to tread carefully, with Federal Reserve potentially hesitant to cut interest rates despite growth concerns, due to the potential inflation risks from tariffs.

Click here to continue reading the Summary of this quarter’s Economic and Investment Update.