UBS Investor Forum

Challenging the UBS House View

Every month, we invite global investment leaders from the fund management industry to challenge our UBS House View. We address global financial questions to make sure we never sin by over-confidence.

How would a trade war affect global markets?

Nicholette MacDonald-Brown - Senior European PM & Co-Head of Pan European Research, Schroders

Lisa Coleman - Head of Global Credit, J.P. Morgan Asset Management

Outside View

  • The trade conflict could cause markets to wobble. But this could create buying opportunities in asset markets.
  • The risk to this upbeat scenario would come if the Trump administration is seeking challenge the "Made in China 2025" initiative, aimed at upgrading Chinese industry.
  • The main global trade tension is between the US and China, over intellectual property violations and the scale of China's bilateral surplus.
  • The US disputes with the EU and NAFTA should be easier to resolve.

UBS House View

  • The escalation in trade tensions has become a growing risk for markets, causing us to reduce our exposure to global equities.
  • We still expect the conflict to be resolved and are not expecting an imminent end to the global economic upswing.
  • But uncertainties have mounted and equity markets are only pricing in the first-order impacts of tariffs that are about to go into effect.
  • Investors are not yet pricing the possibility of larger second-order effects, such as lower investment and hiring by businesses.

Which of the below will be impacted most by a trade war?

Poll Form

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