WeeklyWatch – Markets squeezed by further tariffs

11th March 2025

Stock Take

Tariffs pile on the pressure

Pressure on the stock markets continued last week as a result of Trump’s ambiguous approach towards tariffs.

In the last seven days, the US government has levied an extra 10% tariff on Chinese imports, on top of existing tariffs. It was also announced that Canadian and Mexican imports would be taxed at 25%, quickly followed by a declaration of an exemption for goods compliant with the United States–Mexico–Canada Agreement (USMCA) until 2nd April. The USMCA is a free trade deal that Trump signed during his first term and covers many industries, including automobile and dairy.

The Canadian government then announced their own tariffs on US goods. The Chinese followed a similar pattern by placing tariffs on the US on goods that they’re able to source from elsewhere, including meat and logs.

US finances and markets take a hit

Unsurprisingly, the resulting uncertainty is being reflected in US GDP projections. On Thursday, the Federal Reserve Bank of Atlanta revised its first quarter projections for US GDP to -2.4%, compared to the projection of a -1.5% drop in the previous week and positive projections from earlier in 2025.

The trend was also noticeable in the US markets. Both the S&P 500 and the NASDAQ finished the week down more than 5%.

The Investment Research Director for St. James’s Place, Joe Wiggins, said:

“It is important to remember that financial markets are noisy and unpredictable over short-run horizons, a fact exacerbated by some of the extreme policy uncertainty that surrounds the Trump administration.

“Attempting to make decisions based on the near-term fluctuations of markets is a dangerous and unreliable game, and one that comes with particularly acute risks in the current environment. Taking a long-term view based on fundamentals and supported by sensible diversification is the best way to navigate this backdrop.”

Change in Canada

Over the weekend, former Bank of England governor (2013 to 2020) Mark Carney won the race to become the next Canadian prime minister, replacing Justin Trudeau. As soon as Carney enters office, he’ll need to address two clear areas: managing the tariff disputes with the US and getting ready for the general election, which is currently due on or before 20th October this year.

As part of his opening address, Carney put forward a strong stance on the US–Canadian situation. He stated:

“We didn’t ask for this fight, but Canadians are always ready when someone else drops the gloves.”

European nations keep their heads down

The UK has been able to avoid the tariff spotlight so far; however, last week the FTSE 100 fell, partly due to concerns surrounding the impact of a trade war and the subsequent impact on the global economy.

Across the rest of the continent, there was a positive tale to be told. Equities had another good week, mostly boosted by defence stocks. Additionally, the German market responded brightly after the announcement of a bumper spending pledge. By overhauling current borrowing rules, it’s hoped that the spending will create a €500 billion infrastructure fund, which will ensure that more defence spending can be carried out.

The Head of Economic Research at St. James’s Place, Hetal Mehta, commented:

“Germany is in the midst of a huge and historic policy u-turn. After many years of espousing fiscal prudence, the spending package announced is unprecedented in size and could amount to as much as 3% of GDP on an annual basis. The path to approval is not easy – the lame-duck government must rush this through while it has a two-thirds majority, and a challenge via the Constitutional Court cannot be ruled out. A key question for investors is whether other countries in Europe can similarly rise to the challenge posed by geopolitical tensions.”

Wealth Check 

10 steps to protecting your family and assets

Here at Wellesley, we believe that financial planning and advice is a family affair.

When you have a clear idea of what’s the right choice for you and your family, it becomes a lot easier to create a financial plan that will work for all parties and continues to work after your lifetime.

We’ve created a financial to-do list, which covers the steps you can take to get started on your effective plan to protect your family and its assets.

  1. Consider your long- and short-term plans – Are there immediate goals that you want to save for? A family holiday, a wedding or school fees? Or maybe you’re planning for life events that may seem far away? Reducing your work hours? Need help paying for social care?
  2. Calculate how much you’re worth – Make a list of the amount of pension pots you may have. If you’ve changed jobs, find share certificates and check in on ISAs and savings accounts.
  3. Prepare for emergencies – Ensure you have an easy-to-access cash fund, just in case! This should be enough to keep you supported for six months.
  4. Protect your loved ones, your family home and lifestyle – Taking out an insurance policy could be a huge benefit to your family.
  5. Encourage good money habits early on – Help your children to embrace healthy money behaviours by teaching them to save and budget.
  6. Leave a legacy – What legacy would you like to leave and to which people? Small steps taken early can make a big impact on your family.
  7. Create (or review) your Will – This is particularly important if you have children or there’s a change in your family situation. This legal document is one of the most important you’ll ever write to ensure that your family’s future is secure.
  8. Set up a Power of Attorney (PoA) – This is someone you trust who can make financial or welfare decisions for you should you lose mental or physical capacity.
  9. Think about what’s most important to you and your family – Understanding personal values will help you set clear financial goals.
  10. Get talking! – Make sure you discuss your short- and long-term plans with your family, involving them in decisions and plans going forward.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select, and the value can therefore go down as well as up. You may get back less than you invested.

Will writing and Powers of Attorney involve the referral to a service that is separate and distinct to those offered by St. James’s Place and are not regulated by the Financial Conduct Authority.

The information contained is correct as at the date of the article. The information contained does not constitute investment advice and is not intended to state, indicate or imply that current or past results are indicative of future results or expectations. Where the opinions of third parties are offered, these may not necessarily reflect those of St. James’s Place.

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SJP Approved 10/03/2025