economy
One year on from Trump's 'liberation day,' global investors are rethinking American exceptionalism
U.S. exceptionalism is "no longer automatic" among global investors, one market watcher told CNBC.
TL;DR
- President Trump's 'liberation day' trade policies, announced a year ago, sparked global market volatility and led to a 'Sell America' trade.
- International markets, including Brazil, the U.K., and Japan, have outperformed the S&P 500 in the past year, as investors diversified away from U.S. reliance.
- The U.S. Supreme Court struck down the tariff regime as illegal in February, ordering potential billions in refunds.
- Investors are reassessing U.S. exceptionalism due to tariffs, Fed independence challenges, geopolitical issues, lofty market valuations, and a soaring deficit.
- Capital allocation has shifted, with emerging markets and specific sectors like domestic production, AI, and energy security attracting more attention.
- Diversification is key, with a balanced exposure between U.S. equities and other global markets recommended.
- Concerns over private credit, market concentration, evolving business models, and yield curve steepening suggest diversification away from the U.S. is a sensible strategy.