Trumped – Oswald Grübel on the Impact of US Tariffs

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trumped – oswald grübel on the impact of us tariffs. us tariffs are not immutable and may be significantly revised depending on the outcome of negotiations. however, as long as they remain in effect, their impact on the economy is likely to be detrimental, writes oswald grübel in an exclusive analysis for finews. in this section, authors comment on economic and financial topics. when president donald trump announced his tariffs—alongside punitive measures—in his typically florid rhetoric, the affected governments appeared stunned. clearly, they had not anticipated such a move. overvalued stock markets, already undergoing a correction since late february, responded with unprecedented intensity, shedding $6 trillion in value over just three days. the media seized on the moment, urging governments to take immediate action—even as it remained unclear what effective steps could be taken. meanwhile, president trump has repeatedly affirmed his commitment to tariffs but has paused punitive tariffs for three months and, as always, remains open to a «deal.» this catapulted the stock markets up 10 percent and halved the accumulated losses. however, the move also significantly eroded confidence in the us government, leaving many uncertain about what might follow. what we are witnessing is a retreat from free global trade and a resurgence of nationalist economic policies, driven by the belief that such measures will yield domestic benefits. this shift is not occurring in a vacuum: the post-pandemic spike in public debt, coupled with europe’s growing anxiety over potential conflict with russia, has prompted political leaders to stake everything on a single, high-risk strategy. if this continues, the refinancing of public debt will increasingly compete with private sector credit demand, potentially triggering a recession. trump is not wrong in asserting that many countries have leveraged the us market for their export advantage. however, this was largely possible because the us permitted it – unlike the european union, which safeguarded its markets through stringent product certification measures. the us tariffs will be significantly adjusted depending on negotiation skills, but as long as they exist, the economy will stagnate or shrink. that means less trade, lower profits, tighter credit, and higher unemployment rates. trump’s vision of revitalizing us industry will, with few exceptions, remain a vision during his presidency. these aren’t good prospects for financial markets, apart from some volatile corrections. the unchecked credit expansion of recent years has led to inflated stock market valuations—an imbalance now undergoing correction. the side effects include losses in asset values and credit that are still incalculable. this could even lead to the repatriation of foreign assets, which would have catastrophic consequences for global financial markets. let’s hope for the best and be prepared for the worst. oswald grübel, was ceo at credit suisse (2003 bis 2007) as also at ubs (2009 bis 2011). read all previous articles on finews.first.

US tariffs are not immutable and may be significantly revised depending on the outcome of negotiations. However, as long as they remain in effect, their impact on the economy is likely to be detrimental, writes Oswald Grübel in an exclusive analysis for finews.

In this section, authors comment on economic and financial topics.

When President Donald Trump announced his tariffs—alongside punitive measures—in his typically florid rhetoric, the affected governments appeared stunned. Clearly, they had not anticipated such a move.

Overvalued stock markets, already undergoing a correction since late February, responded with unprecedented intensity, shedding $6 trillion in value over just three days.

The media seized on the moment, urging governments to take immediate action—even as it remained unclear what effective steps could be taken.

«The move also significantly eroded confidence in the US government.»

Meanwhile, President Trump has repeatedly affirmed his commitment to tariffs but has paused punitive tariffs for three months and, as always, remains open to a «deal.» This catapulted the stock markets up 10 percent and halved the accumulated losses.

However, the move also significantly eroded confidence in the US government, leaving many uncertain about what might follow.

What we are witnessing is a retreat from free global trade and a resurgence of nationalist economic policies, driven by the belief that such measures will yield domestic benefits. This shift is not occurring in a vacuum: the post-pandemic spike in public debt, coupled with Europe’s growing anxiety over potential conflict with Russia, has prompted political leaders to stake everything on a single, high-risk strategy.

«Trump’s vision of revitalizing US industry will, with few exceptions, remain a vision.»

If this continues, the refinancing of public debt will increasingly compete with private sector credit demand, potentially triggering a recession.

Trump is not wrong in asserting that many countries have leveraged the US market for their export advantage. However, this was largely possible because the US permitted it – unlike the European Union, which safeguarded its markets through stringent product certification measures.

The US tariffs will be significantly adjusted depending on negotiation skills, but as long as they exist, the economy will stagnate or shrink.

That means less trade, lower profits, tighter credit, and higher unemployment rates.

«The side effects include losses in asset values and credit that are still incalculable.»

Trump’s vision of revitalizing US industry will, with few exceptions, remain a vision during his presidency.

These aren’t good prospects for financial markets, apart from some volatile corrections.

The unchecked credit expansion of recent years has led to inflated stock market valuations—an imbalance now undergoing correction.

The side effects include losses in asset values and credit that are still incalculable. This could even lead to the repatriation of foreign assets, which would have catastrophic consequences for global financial markets.

Let’s hope for the best and be prepared for the worst.

Oswald Grübel, was CEO at Credit Suisse (2003 bis 2007) as also at UBS (2009 bis 2011).