Investors are rethinking US assets

A year ago, on April 2, 2025, U.S. President Donald Trump appeared in the White House Rose Garden with an announcement that would become one of the defining policies of his second term.

The president unveiled a vast list of country-specific tariffs in what he dubbed his “liberation day” trade policies — a move that sparked panic and volatility in markets across the globe.

It included steep duties on imports from many trading partners, including 34% on Chinese goods, 20% on the EU and 46% on Vietnam.

The ensuing sell-off gripped various asset classes across the globe — but U.S. equities, Treasurys and the dollar all took a major hit in what would become the “Sell America” trade.

In the 12 months since “liberation day”, U.S. assets have seen further spates of volatility linked to Trump’s unpredictable policy mix — generating a number of trading trends from ABUSA (Anywhere But the USA) to the TACO (Trump Always Chickens Out) trade.

Some international markets, including the benchmark indexes of Brazil, the U.K. and Japan, have outperformed the S&P 500 in the year since Trump’s “liberation day” announcements, benefiting from investors — particularly those outside of the U.S. — looking to diversify away from an overreliance on American returns.

Washington has since struck a series of trade deals that reduced the tariff rates slapped on various key trading partners, such as the EU, the U.K., India and Switzerland.

But, in February, the tariff regime was struck down when the U.S. Supreme Court ruled it was illegal, with a judge later ordering the government to prepare to potentially pay billions of dollars in refunds to importers who paid the tariffs.

Last month, Trump launched Section 301 investigations into more than a dozen trading partners, including China, the EU, Japan, Switzerland and India, paving the way for the White House to impose import duties on those economies. It came after he imposed a 10% “universal” tariff on imports, which the administration has said will be raised to 15%.

In a note on Monday, Russ Mould, investment director at AJ Bell, said investors were continuing to reassess their exposure to the U.S..  

“Tariffs and strong-arm trade tactics, challenges to the independence of the U.S. Federal Reserve and now military incursions in Latin America and the Middle East, as well as saber-rattling over Greenland, are combining with lofty American stock market valuations and a soaring Federal deficit and prompting investors to reassess the narrative of American exceptionalism,” he said.

Trump’s so-called reciprocal tariffs announced last April “took trade policy to a whole new level,” Mould added.

While he noted that neither stock nor bond markets welcomed the policy, Mould pointed out that markets rebounded quickly when Trump walked back parts of his tariff policy.

“However, investors do seem to have thought carefully about where to allocate capital in a post-liberation day world, and…