Trump Tariffs Might Chill, But the Fire Isn’t Out Yet” – UBS Drops a Reality Check
Just when the world thought the Trump trade war talk was done and dusted, UBS comes in with a bold view: The worst might be over, but don’t put your guard down just yet.
UBS analysts believe the U.S. tariff rate could settle around 15% — not too low to ignore, but not enough to crash the economy. In plain words? The pressure is here to stay, but it won’t burst the pipe.
This 15% level may slow down growth a bit, but UBS doesn’t expect it to trigger a recession. In fact, they see this as a green signal for investors to jump back into the market — especially in AI, energy, and future-focused innovation stocks. If you’ve been sitting out, UBS says: Look for the dip. Be ready.
But Here's the Catch: Sector Tariffs Could Still Sting
The U.S. might avoid blanket tariffs, but sector-specific hits are still on the table. UBS highlights possible new levies on semiconductors, pharma, and EVs. These are no small sectors — they power the backbone of global supply chains.
So while Wall Street might breathe a little easier, businesses in those key industries could still get burned. One move from Washington, and trade flows can shift overnight.
And What About Forex? Here's Where It Gets Interesting
This isn’t just stock market gossip. If tariffs stay controlled and no full-blown war breaks out, we could see risk sentiment improving. That means traders might move away from safe-haven currencies like the USD and JPY, and look more toward growth currencies like the AUD, NZD, and CAD.
But if the U.S. suddenly slaps a sector with new trade restrictions, expect volatility to spike. Pairs like USD/CNY, AUD/USD, USD/JPY, and even EUR/USD could react sharply.
Impact:
UBS’s forecast could mean short-term USD weakness, stronger commodity currencies, and increased movement in major forex pairs — all depending on how trade policies evolve.
