Solomon Macro: Tariff War 2.0
Asian markets and US futures tumbled following Trump's announcement of sweeping global tariffs. A rapid-response macro analysis of the initial market reaction and positioning implications.
Asian markets and US futures tumbled Thursday following US President Donald Trump's announcement of sweeping tariffs on global trade partners.
The initial market reaction was severe and broad: risk assets sold off in unison, safe havens rallied, and volatility spiked across asset classes. The pattern is consistent with a genuine macro surprise — not a 'buy the news' event but a structural uncertainty shock.
The critical question for investors is not the tariff rate itself but the credibility of the negotiating position. If tariffs are a bargaining chip, the appropriate response is to fade the volatility. If they are a permanent structural shift in US trade policy, the repricing is early-stage.
Our base case: partial negotiated rollback within 90 days on the largest bilateral relationships, with residual tariffs on strategic sectors (semiconductors, EVs, steel) becoming permanent features of the trade landscape. That base case supports a tactical bounce but a lower structural ceiling for globally-exposed equities.
