Navigating the tariff rollercoaster: expert advice for investors

2025-05-22 general

New York, Thursday, 22 May 2025.
Financial experts are offering guidance after the market’s surprising rebound. President Trump’s declaration that China will ease trade barriers has created a stir. Semiconductor companies face both potential gains and considerable hazards. Jamie Dimon, CEO of JPMorgan Chase, warns of ‘extreme complacency’ following the market’s recovery. He suggests the risk of inflation and stagflation is higher than anticipated. The market initially dropped 10%, only to bounce back, a phenomenon Dimon views with skepticism.

Expert opinions on market volatility

Citigroup CEO Jane Fraser echoes this sentiment, noting that ‘uncertainty remains’ [3]. Fraser highlights that businesses are pausing decisions, delaying capital expenditures, and holding off on hiring, bracing for potential demand shocks and supply chain disruptions [3]. This cautious approach underscores the fragility of the recovery and the potential for continued market volatility [3]. Investors should remain vigilant and consider these broader economic concerns when making portfolio adjustments [1].

Impact on investment banking and trade

JPMorgan Chase anticipates a mid-single-digit percentage decrease in investment banking fees for the second quarter compared to last year, signaling a potential slowdown in deal-making activity [3]. However, trading revenue is expected to remain at a high single-digit level [3]. Dimon also points out that the full effects of the Trump administration’s tariff policies are not yet fully realized, and even at current levels, they are ‘quite extreme’ [3]. Fitch Ratings emphasizes that uncertainty surrounding final tariff rates remains a critical factor in macroeconomic forecasting [8].

Navigating global trade dynamics

While the U.S. has seen some tariff adjustments, other regions are implementing new trade policies that could impact global commerce [7]. The EU, for example, is proposing a €2 fee on small parcels shipped directly to consumers, primarily targeting Chinese e-commerce platforms like Temu and Shein [7]. This new tax impacts parcels valued under €150, which were previously exempt from tariffs [7]. With over 90% of the 4.6 billion such parcels entering the EU last year originating from China, this could shift trade flows [7].

Shifting focus in the photovoltaic industry

The photovoltaic (PV) industry is experiencing a shift in demand from traditional markets in Europe and the U.S. to emerging markets like the Middle East, Latin America, and Africa [4]. In the first quarter of 2025, China’s PV exports decreased by 30.5%, but this decline doesn’t indicate a shrinking market, but rather a structural adjustment [4]. High tariffs and local protectionist policies in the U.S. and Europe are pushing Chinese companies to explore new markets [4]. For example, the U.S. imposed tariffs as high as 3403% on PV components from Southeast Asia [4].

Uncertainty in the furniture industry

The uncertainty surrounding U.S. tariff policies is causing significant concern in the furniture industry [6]. The U.S. imports tens of billions of dollars’ worth of furniture and home goods annually, with imports exceeding $10 billion in the first quarter of this year [6]. Increased tariffs are pressuring furniture brands to raise costs, and companies are struggling to navigate the unpredictable trade landscape [6]. Some companies are actively seeking alternative markets to mitigate the impact of U.S. tariffs [6].

Bronnen

tariff recovery market advice