Buckle up! Private bank CIOs list top hedge tools amid Trump's tariffs
Donald Trump’s campaign promise to impose sweeping new tariffs on imports is making waves across global markets, with private banks warning that such protectionist policies could trigger inflation, disrupt supply chains and cloud the outlook for monetary easing.
Chief investment officers (CIOs) are urging clients to review hedges and asset allocations, fearing the measures could reignite inflation, disrupt supply chains and delay central bank easing.
Gold and high-quality fixed income assets are still the most favoured strategies to go through the turbulence, according to UBS, Standard Chartered, Nomura, and OCBC.
Top safe-haven asset
Top voices from private banks also flagged India as a relative beneficiary, thanks to its growing role in global supply chains and the perception of political neutrality. Standard Chartered highlighted the country’s appeal for friendshoring strategies, while UBS pointed to resilient domestic consumption trends in India that could help offset global headwinds.
UBS and Standard Chartered both suggested that if the trade war escalates and recession fears return, gold could regain its status as a safe-haven asset.
“We continue to think gold prices have not yet peaked. We have raised our 12-month gold price forecast to $3,400/oz from $3,100/oz,” added Aaron Chwee, head of wealth advisory at OCBC.
Hard time for Asian equities
While framed by Trump as a bid to revive American manufacturing and cut dependency on China, CIOs noted the effects may be far more complex.
“Liberation Day could end up shackling Asia’s exporters, not liberating them,” Standard Chartered wrote in its CIO Weekly. The bank sees the tariffs as a supply chain disruptor, particularly for East Asian economies that depend heavily on trade with the US. The bank also warned that the inflationary impact of such tariffs could limit the Federal Reserve’s (Fed's) ability to cut interest rates, a key concern for investors banking on looser monetary policy in the second half of 2025.
UBS echoed those concerns in its note, emphasising that tariffs act like a tax on consumers and could revive price pressures just as inflation shows signs of easing.
"A stagflationary mix of higher prices and slower growth could weigh on risk sentiment,” according to UBS, suggesting that portfolios might need to be recalibrated for a less dovish Fed and more volatile markets.
Nomura also pointed out that Asian equities, especially export-oriented ones, are vulnerable to the tariff threat, and that markets had not yet fully priced in this geopolitical risk. The Japanese bank also sees a renewed US-China trade war as a scenario that could lead to a reallocation of capital out of China and into more politically neutral countries like India and Vietnam.