Many investors went into 2025 assuming Donald Trump would use tariffs as a negotiating tool, but this belief has been shaken in recent weeks, generating significant market angst. But Trump’s fiscal strategy may yet lead to a benign outcome for the global economy.
The Trump administration is clearly intent on targeting the U.S.’s twin deficits. The White House is seeking to address the fiscal deficit – which has risen to around 6% of GDP – by slashing government payrolls via the Department of Government Efficiency (DOGE). And it’s currently trying to reduce the trade deficit through tariffs.
Funds that invest in gold miners are set to attract their largest net monthly inflows in more than a year in March, as record-high gold prices improve firms' profit outlooks and boost cash flow. Although gold prices also rose last year, miners still struggled to offset inflation-driven spikes in labour and fuel costs while facing regulatory hurdles such as tax disputes in Mali and project delays in Canada. As a result, investors mostly shunned equity funds focused on gold miners, opting instead for traditional gold funds that offered a safe haven during the Russia- Ukraine war and escalating trade tariff concerns after Donald Trump won the U.S. election in early November.
U.S. retailers Walmart and Target are bickering behind the scenes with their suppliers over proposed price hikes on everything from cake pans, tote bags and toys to other merchandise. The outcome of their talks will determine when and by how much merchandise prices rise - and even which products retailers will keep on store shelves. Major retailers say they can't just raise retail prices without losing market share and alienating American shoppers. Their stance is leading to acrimonious discussions about pricing with goods suppliers whose costs have shot up following President Donald J. Trump's tariffs.
