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60 Economies, 1 Tariff Shock: Most Portfolios Aren't Ready
deVere CEO Nigel Green says simultaneous tariffs on 60 economies create portfolio risk most haven't priced in. Rates vary from 10% to 12.5%, with currency and bond moves expected.
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The Trump administration confirmed new tariffs on imports from roughly 60 economies Friday, with rates of 10% to 12.5% tied to a forced-labour investigation. The move is the broadest trade action since the Supreme Court struck down the earlier global tariff structure in February. It touches nearly every major US trading partner at once – Canada, the EU, Japan, India, Switzerland, Taiwan, Mexico and dozens more.
Nigel Green, CEO of deVere Group, said most portfolios are not built for that kind of simultaneous shock. He is telling clients trade policy has stopped being background noise and become something they have to actively plan around. The levies follow an investigation into forced-labour practices across the targeted economies. A separate probe into industrial overcapacity across 16 more economies is already underway.
Rates vary by relationship. Canada, the UK, the EU, Taiwan, Mexico and India secured the lower 10% tier tied to forced-labour compliance. Japan, Switzerland, South Korea and dozens of others face 12.5%. The differential matters because companies had priced in earlier bilateral deals or tariff suspensions. Where the new rate diverges sharply from those expectations, the adjustment could be more violent, Green said.
Currency markets are likely to move first. A uniform tariff shock on this scale tends to strengthen the dollar in the short run as import costs rise and the trade-weighted index reprices. Yet the differentiation creates winners and losers – currencies of countries facing the higher tier may weaken more, while those at 10% could see less pressure. Bond yields also face pressure: higher tariffs are inflationary at the margin, which could push the front end of the curve higher and steepen the curve if the Fed stays on hold. Equity sector rotation is already under way. Sectors with heavy import exposure – consumer goods, autos, electronics – will take the first hit. Domestic-focused industrials and services may hold up better, traders said.