On March 8, U.S. President Trump imposed a 25% tariff on steel imports and a 10% tariff on aluminum imports. The tariffs were imposed under the guise of national security, which was an expedient way for the president to impose tariffs without congressional approval. Not surprisingly, countries impacted by the tariffs have threatened to retaliate. However, the tariffs on steel and aluminum alone should have only a minor impact on the US and global economy.
From a longer-term view, the risk of protectionism relates to the Political Fragmentation theme from our 2018 Investment Themes and Opportunities. We do not suggest clients take any immediate action as a result of the tariffs imposed by President Trump, though it would behoove you to monitor the situation and its impact on your investment portfolio.