Trade Wars, Tariffs, and the Path to Resilient Growth: Where to Invest Now

The global economy is teetering on the edge of its weakest post-pandemic expansion, with the OECD projecting growth to slump to just 2.9% in 2025, driven by escalating trade barriers under U.S. President Trump's tariffs. As geopolitical tensions and protectionism stifle recovery, investors must pivot to sectors and regions poised to thrive in this fractured landscape.

The Tariff Trap: How U.S. Policies Are Sabotaging Growth

The OECD's stark warning is clear: trade wars are the primary drag on global growth. U.S. tariffs have surged to 15.4% on average, the highest since the Great Depression, with critical sectors like semiconductors and electric vehicles facing cumulative rates exceeding 100%. While the U.S.-China tariff truce temporarily lowered rates to 10%, overlapping duties (e.g., fentanyl tariffs, Section 301 penalties) ensure effective rates remain punitive.

The U.S. economy itself is paying the price. GDP growth has been slashed to 1.6% in 2025, with inflation spiking to nearly 4%—double the Fed's target. This turmoil creates a “lose-lose” scenario: businesses face higher costs, consumers endure weaker purchasing power, and global supply chains fragment further.

Capitalize on the Fractured Landscape

While the U.S. falters, opportunities are emerging where trade barriers are being dismantled or avoided:

1. ASEAN: The New Global Trade Hub

• Why Now? ASEAN's strategic location and free trade agreements (e.g., RCEP, CPTPP) are attracting manufacturers fleeing U.S. tariffs. Exports grew 8% YoY in 2025, fueled by electronics and automotive parts.
• Invest Now: Target companies expanding in Vietnam and Malaysia. .

2. UK-India: A Post-Brexit Powerhouse

• Why Now? The 2022 U.K.-India trade deal aims to double bilateral trade to £50 billion by 2030, prioritizing pharmaceuticals and renewables. Post-Brexit, the U.K. is forging FTAs with ASEAN, offering access to EU-like markets without the EU's regulatory entanglements.
• Invest Now: Pharma leaders like , and renewable energy firms partnering with India's $500 billion energy transition plans.

3. Tech Supply Chains: Diversify or Die

• Why Now? Companies reliant on U.S.-China supply chains face crippling tariffs. Winners will be those shifting production to tariff-free zones (e.g., ASEAN) or investing in automation.
• Invest Now: .

Act Now: The Clock Is Ticking

The U.S.-China tariff truce expires in 90 days, with no guarantee of renewal. Meanwhile, inflation risks and policy uncertainty loom. Investors who delay risk being left behind as capital floods into tariff-protected markets.

Strategic Allocations for 2025:
- Regions: ASEAN, U.K., and India.
- Sectors: Tech supply chains, pharmaceuticals, and renewable energy.
- Avoid: U.S. consumer staples and industries exposed to retaliatory tariffs (e.g., steel, solar panels).

The writing is on the wall: trade wars will persist, and growth will be uneven. The smart money is already moving to flexible supply chains, low-tariff corridors, and free-trade blocs. Don't wait—reposition your portfolio before the next tariff wave hits.

The time to act is now.