The world’s largest trade war shows no signs of letting up, and investors are growing increasingly uneasy. Even if US President Donald Trump postpones some or all of his tariffs on Canadian and Mexican goods, the possibility of more sudden and unpredictable bursts of US hostility continues to undermine the North American economy.
Mr. Trump’s economic policies have left many respectable economists bewildered, with falsehoods that need correction. He claims a trade deficit is not a subsidy, but experts disagree. He also thinks erecting comprehensive trade barriers would make a nation richer, which is not supported by evidence. Furthermore, the US does not need a strategic cryptocurrency reserve.
The self-harm caused by Mr. Trump’s policies has led to speculation about his motives. Some believe he models himself after authoritarian leaders like Vladimir Putin and Viktor Orban, who use patronage to maintain power. This could have ominous implications for the rule of law in the US.
Investors should be cautious and consider diversifying their portfolios. Canadian dividend stocks and government bonds offer attractive options, while European and Asian markets look cheap on valuation measures. However, investors should not base their stock picks solely on politics; instead, they should seek a balanced approach that takes into account economic fundamentals and risks.
As the US economy continues to be shaped by Mr. Trump’s policies, it is essential for investors to remain vigilant and adjust their strategies accordingly. With the US dollar sliding against other currencies, investors may consider alternative assets to protect their wealth.
Source: https://www.theglobeandmail.com/investing/markets/inside-the-market/article-in-the-age-of-trump-theres-a-growing-case-to-invest-outside-the-us