Skip to content
Search
By  Thomas Poullaouec

Ausbiz: What's the end game for Trump's tariffs?

May 2025

Video Player is loading.
Current Time 0:00
Duration 0:00
Loaded: 0%
Stream Type LIVE
Remaining Time 0:00
 
1x
    • Chapters
    • descriptions off, selected
    • captions off, selected
      View Transcript

      Let's get more on the implications now of Trump's tariffs.

      Thomas Poullaouec is joining us now from T. Rowe Price.

      Thomas, good to catch up with you again.

      Thanks for joining us here at Ausbiz.

      Do you think is perhaps the markets investors have lost the overall goal of what Donald Trump is trying to achieve here?

      Look, I think the goal can be simplified into in two ways.

      One is to bring back manufacturing to the US and the second is to raise revenue through tariffs.

      It's part of a broader goal as well, which has been to really bring more purchasing power to the average American.

      And that is coming through manufacturing, as we said, but also lowering inflation and that is coming through lowering the price of oil and having lower yields.

      But having said that, what has been created through all of these measures in the past 100 days have been a lot of uncertainty.

      And this uncertainty has been measured through confidence indices by businesses, by consumer, by investor.

      You have seen a sharp drop of these measures from 5% to 20% depending on the indicators that you are looking at.

      And that has been creating all the volatilities that we have.

      So when you have uncertainty, you impact the soft data, which is confidence, not the hard data and that is creating the volatilities that we have seen in the market.

      So I don't think that the market is lost. Everybody is lost about what would be the trajectory to get to the ultimate goal.

      And that is why you should expect more volatility going forward.

      So are you saying that as investors may be making a mistake, assuming that the aim is to bring global tariffs down, where is the Trump administration more likely to keep that 10% floor on tariffs for now?

      If so, what's the result?

      Yeah.

      So I think we are perhaps past the peak tariffs.

      So I will not deny that we perhaps have seen the worst with the first announcement on April 2nd.

      But having said that, the tariffs will still be a more elevated than it was in January.

      So we should not even if we end up with 10% across the board on tariffs for reciprocals and 60% of tariffs in China, that is still much higher than we were before.

      So that will create a lot of uncertainty on how to reprise that.

      There is also some discussion about sector all tariffs which would be implemented through Section 232 and these ones may take a lot of time, anything between 90 days to 250 days.

      So all of that will give more clarity.

      But again, this is perhaps one year from now.

      So I'm a bit surprised by how complacent the market became in the later part of April by having more hopes and dreams about what these tariffs could end up being.

      We have hopes that the tariffs will be lower, that negotiations are going well, that you will have exemptions.

      And all of that is creating a perhaps a false sense of confidence that there is a quick end to this tariff uncertainty.

      And I don't think this will be the case because it will take time to unfold all the tariff policies that Trump and his administration will have in mind.

      Meanwhile, we are seeing economic data point to a slow down there.

      The risks remain perhaps of a recession.

      From an investor point of view, what do you need to be mindful of?

      Do you think perhaps the market is still being overly optimistic?

      The very idea I think some of the valuations and now back to before April.

      So what we are seeing is that with this drop of confidence that I was mentioning to before from a business confidence, consumer confidence and investor confidence, you have a risk to see really the data following through in the next couple of quarters with a sharp drop of consumer spending for example.

      So you have to watch the job market in the US which is key.

      the US is 60%, 70% consumer driven.

      So this is a key data to follow.

      What we do in our portfolio is to remain quite conservative.

      We have an underweight inequity.

      We try to be underweight the more, the higher expensive markets like the US. So these ones will be slightly underweight because we think that the marginal investment will go to places where you have fiscal stimulus.

      So Europe is one of them where you have capacity to ease monetary policy.

      Asia is another one.

      So you can be more overweight into Europe, into Asia, which at the margin might benefit from a cheaper evaluation to start with and more progress policies.

      Thomas Poullaouec, Head of Multi-Asset Solutions, APAC, discussed the implications of Trump's tariffs, suggesting their main goal is to boost U.S. manufacturing and raise revenue. However, such measures bring uncertainty, affecting confidence indices and market volatility.

      Thomas Poullaouec Head, Multi-Asset Solutions, APAC
      Market Volatility Insights

      Tariff Wars & Market Implications

      Disclaimer

      The views, information, or opinions expressed in the interview are those of the Investment Professional and are subject to change without notice. It is not intended to be securities recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment.

      202505-4463069

      Open

      Audience for the document: Share Class: Language of the document:
      Open Cancel

      Open

      Share Class: Language of the document:
      Open Cancel
      Sign in to manage subscriptions for products, insights and email updates.
      Continue with sign in?
      To complete sign in and be redirected to your registered country, please select continue. Select cancel to remain on the current site.
      Continue Cancel
      Once registered, you'll be able to start subscribing.

      Change Details

      If you need to change your email address please contact us.
      Subscriptions
      OK
      You are ready to start subscribing.
      Get started by going to our products or insights section to follow what you're interested in.

      Products Insights

      GIPS® Information

      T. Rowe Price (“TRP”) claims compliance with the Global Investment Performance Standards (GIPS®).

      A complete list and description of the Firm's composites and/or a presentation that adheres to the GIPS® standards are available upon request. Additional information regarding the firm's policies and procedures for calculating and reporting performance results is available upon request

      Other Literature

      You have successfully subscribed.

      Notify me by email when
      regular data and commentary is available
      exceptional commentary is available
      new articles become available

      Thank you for your continued interest