Uploaded April 2025 | Updated September 2026, 2 weeks ago
Wednesday, 9 April 2025, saw the U.S. impose a 104% tariff on China. Beijing retaliated and raised its levy on U.S. imports to 84%. Will this tit for tat erode globalisation, or had the world trade model started unravelling years before Trump took office the first time round?
Financial economist Victor Hill talks to Sarah Lowther about the end-of-life psychology driving Donald Trump's executive orders and how equities aren't in the dire straits some commentators would have investors believe.
Victor compares Trump's actions to the Nixon Shock of 1971 and argues that while tariffs could generate significant revenue, they could also lead to increased inflation and a potential recession. As usual there's a silver lining and threads of optimism as Victor concludes that despite market volatility, long-term US Treasury yields and safe-haven assets like gold and the Japanese Yen are showing resilience.
Key moments:
00:00 Intro
00:10 The impact of tariffs on trade
Victor Hill reflects on the historical context of tariffs, pointing out that they have been a common practice throughout economic history, particularly as a means of protecting domestic industries. He highlights the fact that – despite their significant potential impact – tariffs are just one of three forms by which trade flows are inhibited between nation states. Alongside tariffs, Victor also cites so-called trade frictions such as excessive regulations, inspections and procedures, as well as subsidies, particularly in the area of agriculture.
12:29 The impact on stock markets
Victor Hill does not currently see a bear market despite recent turbulences across the FTSE 100 and Wall Street, as valuations remain at record levels for many listed companies. While acknowledging a stock market reaction due to the negative effect of tariffs on corporate profitability and the risk of recession, Victor points out that the risk of recession had already been present. He also suggests that despite challenges created for businesses, many businesses will be able to adapt through strategies such as reshoring, changing product compositions, improving efficiencies, or accepting lower profitability.
17:49 The state of US treasuries
Victor Hill reflects on the most recent bond yield increase in the US while pointing out that the yield had actually come down since January 2025. He also sees some evidence of a move from treasuries towards safe haven assets like gold or currencies such as the Japanese yen and the Swiss franc, but does not consider this development a major cause for concern.
20:59 The state of the middle classes
Victor Hill raises concerns about the state of the middle classes in the Western world, citing the decline of life expectancy in the UK and the US as the indicator of a major problem. Considering the sluggish growth in the UK and Europe a key barrier to prosperity, he suggests the low interest rates set by central banks, which led to persistent inflation, as one underlying fundamental yet underestimated factor. With US tarrifs set to increase inflation levels further, Victor does not envisage the anticipated interest rate cuts to happen, with a knock-on effect on bond markets.
Listen to this webinar as a podcast at
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Wednesday, 9 April 2025, saw the U.S. impose a 104% tariff on China. Beijing retaliated and raised its levy on U.S. imports to 84%. Will this tit for tat erode globalisation, or had the world trade model started unravelling years before Trump took office the first time round?
Financial economist Victor Hill talks to Sarah Lowther about the end-of-life psychology driving Donald Trump's executive orders and how equities aren't in the dire straits some commentators would have investors believe.
Victor compares Trump's actions to the Nixon Shock of 1971 and argues that while tariffs could generate significant revenue, they could also lead to increased inflation and a potential recession. As usual there's a silver lining and threads of optimism as Victor concludes that despite market volatility, long-term US Treasury yields and safe-haven assets like gold and the Japanese Yen are showing resilience.
Key moments:
00:00 Intro
00:10 The impact of tariffs on trade
Victor Hill reflects on the historical context of tariffs, pointing out that they have been a common practice throughout economic history, particularly as a means of protecting domestic industries. He highlights the fact that – despite their significant potential impact – tariffs are just one of three forms by which trade flows are inhibited between nation states. Alongside tariffs, Victor also cites so-called trade frictions such as excessive regulations, inspections and procedures, as well as subsidies, particularly in the area of agriculture.
12:29 The impact on stock markets
Victor Hill does not currently see a bear market despite recent turbulences across the FTSE 100 and Wall Street, as valuations remain at record levels for many listed companies. While acknowledging a stock market reaction due to the negative effect of tariffs on corporate profitability and the risk of recession, Victor points out that the risk of recession had already been present. He also suggests that despite challenges created for businesses, many businesses will be able to adapt through strategies such as reshoring, changing product compositions, improving efficiencies, or accepting lower profitability.
17:49 The state of US treasuries
Victor Hill reflects on the most recent bond yield increase in the US while pointing out that the yield had actually come down since January 2025. He also sees some evidence of a move from treasuries towards safe haven assets like gold or currencies such as the Japanese yen and the Swiss franc, but does not consider this development a major cause for concern.
20:59 The state of the middle classes
Victor Hill raises concerns about the state of the middle classes in the Western world, citing the decline of life expectancy in the UK and the US as the indicator of a major problem. Considering the sluggish growth in the UK and Europe a key barrier to prosperity, he suggests the low interest rates set by central banks, which led to persistent inflation, as one underlying fundamental yet underestimated factor. With US tarrifs set to increase inflation levels further, Victor does not envisage the anticipated interest rate cuts to happen, with a knock-on effect on bond markets.
Listen to this webinar as a podcast at
Master Investor website: masterinvestor.co.uk/podcast-master-investors
Spotify: open.spotify.com/show/63z9slJY2IWEl8aNEnDnbn
Apple Podcasts: podcasts.apple.com/gb/podcast/master-investors/id1453969142
Google Podcasts: podcasts.google.com/feed/aHR0cHM6Ly9mZWVkcy5ibHVicnJ5LmNvbS9mZWVkcy9tYXN0ZXJpbnZlc3RvcnMueG1s
Subscribe on Android: subscribeonandroid.com/feeds.blubrry.com/feeds/masterinvestors.xml
Subscribe by Email: subscribebyemail.com/feeds.blubrry.com/feeds/masterinvestors.xml
Keep in touch:
Substack | masterinvestoruk.substack.com
Newsletter | masterinvestor.co.uk/subscribe
Twitter | twitter.com/masterinvestor
Facebook | facebook.com/masterinvestor
LinkedIn | linkedin.com/company/masterinvestor
TikTok | tiktok.com/@masterinvestoruk.
