Why Trump’s trade agenda threatens real assets and global growth
Donald Trump’s ill-judged global tariff scheme, and the sledgehammer approach it entails, is a clear signal that the US has fully pivoted towards an aggressive and isolationist trade stance with far-reaching economic consequences.
Despite the announced 90-day delay in implementation of the regime, the uncertainty it has unleashed is ongoing.
Tariffs on this scale function as a tax on everything from cars to construction materials, driving up costs for consumers and businesses alike. In a global economy already struggling with the aftershocks of pandemic-related supply chain disruptions, high interest rates and geopolitical uncertainty, this could be the tipping point. If implemented on the scale being threatened, the tariff regime leaves global growth prospects looking dim, and puts the US itself at risk of recession.
The IMF and World Bank have repeatedly warned that a fragmented global trading system could significantly hit global GDP, particularly harming developing economies that rely on open markets to grow and access capital.
Inflationary impact
The first-order effect of sweeping tariffs is inflationary – higher import prices push up consumer costs. But the secondary effects are equally worrying. Trade retaliation, reduced investment confidence and distorted supply chains mean long-term uncertainty for industries reliant on cross-border inputs, logistics and demand.
The ramping up of tariffs will likely lead to a global reconfiguration of supply chains, but not in a way that necessarily benefits efficiency or innovation. It injects unpredictability, fuels volatility and undermines business planning.
For real estate and real assets investors, the implications are severe. These sectors thrive on long-term confidence, stable input costs and clear macroeconomic signals. In real estate, for example, the construction sector is exposed to the cost of imported materials, such as steel, glass and machinery, all of which would rise sharply under an aggressive tariff regime. At a time when financing costs are already elevated, further pressure on development margins could freeze projects, or make them financially unviable.
New investment under threat
In logistics and industrial real estate, tariffs create uncertainty over demand for warehousing, distribution and cross-border trade infrastructure. A sharp drop in global trade volumes would challenge the viability of new investment in these areas. Likewise, real asset strategies, like infrastructure funds, private equity in manufacturing and global logistics platforms, would need to recalibrate risk models to reflect more volatile trade flows and potential capital restrictions.
Global investors are also watching what tariffs mean for asset allocation. Protectionism often leads to slower growth, higher inflation and more volatile currencies: a challenging backdrop for capital preservation and yield generation, to say the least. If Trump follows through on his announced tariffs, we may see a flight to perceived safe havens, but with fewer ‘neutral’ jurisdictions in an increasingly divided global trade order.
Emerging markets – particularly those dependent on exports to the US – could face capital outflows and downgrades in growth, just as they are working to attract global investment into infrastructure and sustainable development.
The simple truth is that the US’s trade stance is a strategic threat to global investment confidence and the foundational systems that real estate and real assets rely on to grow. The only slim hope is that the strong message sent by the markets about the foolishness of the tariff policy will make Trump blink. But it would be sensible for investors to prepare for the worst even if they hope for the best. z
Courtney Fingar is the founding partner of Fingar Direct Investment and a contributing editor to Real Asset Insight.
