JPMorgan accurately details how Trump’s trade war will work – what investors should do
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JPMorgan published new research that ultimately elaborated on Trump’s basic case with tariffs.
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In this case, the effective tariff rate will drop in the range of 10% to 20%.
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The company can adjust the new tariff environment for investors.
JPMorgan Chase expects President Donald Trump’s tariff blitz to create “some deals” between the U.S. and its trading partners, but says tax rates will still increase.
In the new study, JPMorgan Wealth Management’s global investment strategy team outlines its basic case of Trump tariffs. In this case, the company said the effective tax rate would be between 10% and 20%, a significant increase from 2% starting the year.
“This represents a meaningful increase in import taxes, but estimates on Wall Street’s estimated “Freedom Day”.”
Trump touted protectionists as a powerful negotiating strategy to lead to better trade deals. Although JPMorgan said this would lead to a slowdown in economic growth and increase unemployment and inflation, it does see the United States nearly plunge into a full-scale recession.
JPMorgan
The company said structured notes can provide defensive stocks at the same time, while providing income through option premiums. The strategy generates revenue in a turbulent environment, albeit based on some kind of upswing.
JPMorgan said volatility will provide hedge funds with more opportunities to “harness market errors and relative value games for asset classes.” The company also appears to offer diversification and avoid the low side during the decline.
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