(Kitco News) – New U.S. trade tariffs are reshaping global expectations, impacting inflation outlooks and risk sentiment as they add a new layer of uncertainty for investors, according to Julia Khandoshko, CEO of European broker Mind Money.
“With these tariffs, Trump has opened a new Pandora's box with no good exits,” Khandoshko told Kitco News on Wednesday afternoon. “The fact is that a tariff war is a conflict where no one is a winner, but everyone is a loser. All this has greatly increased global insecurity, and is weakening America's position as a trustworthy state every day.”
“The political and legal risks have only grown, and they have increased seriously.”
U.S. President Donald Trump's new global tariffs came into effect at 10% on Tuesday – despite his insistence that they would be raised to 15% – after the Supreme Court ruled on Friday that he lacked the authority to impose many of the country-specific tariffs he introduced beginning last April.
Against this background, Khandoshko said the market is being forced to reconfigure its expectations. “The new tariffs mean that this regime will be even longer,” she said. “Inflation expectations are rising through increasing import prices, and the risks of shortages are growing as a consequence. Nothing good, in the end.”
She characterized the current economic effect as moderate, however. “The stock market’s bullish era is not ending, but the appetite for risk is seriously decreasing,” she said. “Even the treasuries seem to be more volatile, but remain relevant.”
“This tariff story is not a game changer in the end,” she added. “It's kind of a light shift to the new rules for the same game.”
Turning to Europe, Khandoshko said the main problem she sees in the region is “the lack of ambition.”
“There is also the lack of a unified foreign policy and strategic autonomy,” she said. “The region, which was previously the leader in GDP, is now vulnerable to external decisions, without an active position in such trade disputes.”
