Tariffs Now the Top Macroeconomic Concern for Global Investors, Survey Finds

Tariffs and escalating trade tensions have emerged as the number one macroeconomic risk for institutional investors and wealth managers worldwide, according to a new survey by UK investment giant Schroders.

The survey, conducted between April and May 2025, revealed that nearly two-thirds (63%) of top investors view trade levies as the most significant factor affecting their investment strategies. The result reflects growing uncertainty around global trade policies, particularly those involving the U.S., China, and Europe.

This perceived threat from tariffs ranked more than six times higher than any other macroeconomic concern, the survey found. Over 1,000 investment professionals representing $67 trillion in assets under management participated in the poll.

Rising Tariff Fears Reshape Investment Strategies

The dramatic rise in protectionist policies and import taxes has investors on high alert. In response, around 80% of respondents indicated plans to increase exposure to actively managed funds in the next 12 months, aiming to better navigate market volatility and geopolitical uncertainty.

“Resilience is now at the top of the investment agenda,” said Johanna Kyrklund, Group Chief Investment Officer at Schroders. “With structurally higher interest rates and high debt levels, passive strategies may no longer suffice in a world defined by fragmentation and economic divergence.”

Kyrklund added that active investment strategies are increasingly crucial for managing complexity, creating portfolio resilience, and identifying high-quality opportunities in uncertain times.

UK Exports to U.S. Plunge Amid Tariff Shock

The impact of new U.S. tariffs has already rippled through global trade. UK exports to the U.S. plummeted by £2 billion ($2.71 billion) in April, according to the Office for National Statistics (ONS) — the largest monthly drop since records began in 1997.

The value of British goods exported to the U.S. fell to £4.1 billion, the lowest level since February 2022. The ONS attributed this sharp decline to the implementation of new U.S. tariffs on UK goods. Key sectors affected include automotive, chemicals, and metals.

Imports from the U.S. to the UK also fell by £400 million, leading to a U.S. trade surplus in goods with the UK for the first time since May 2024.

Trade Deal Yet to Ease Market Anxiety

While the UK and U.S. announced the framework of a trade deal in early May, key tariff provisions are still in effect. Under the tentative agreement:

Steel and aluminum tariffs (previously 25%) are set to be removed.

Up to 100,000 UK-made cars per year will face a reduced 10% tariff.

Other goods remain under elevated duty levels until final terms are ratified.

Although President Trump has taken a more favorable approach to the UK during his second term — partly due to his alignment with Prime Minister Keir Starmer — broader tensions with the EU and China remain high.

UK Economy Faces Trade Drag and Weak Labor Data

The ONS also reported that the UK economy contracted by 0.3% in April, worse than the 0.1% drop forecasted by economists. The services sector shrank 0.4%, while construction output rose slightly by 0.9%.

Labor market indicators further pointed to softening conditions, with:

Unemployment rising to 4.6%, up from 4.5%

Job vacancies dropping by 7.9%

Wage growth slowing to 5.3%, from 5.6%

These figures come just weeks after the UK posted a strong 0.7% GDP growth rate in Q1 2025, raising concerns that momentum may be fading amid global economic headwinds.

“The UK economy was always set for a course correction after a strong start to the year,” said Sanjay Raja, Chief UK Economist at Deutsche Bank. “While April’s headwinds may ease, they won’t disappear. Trade uncertainty, weakening labor demand, and restrictive monetary policy will weigh on growth.”

Conclusion: Strategic Adaptation Needed Amid Ongoing Uncertainty

With tariffs now dominating investor concerns, the global financial landscape is entering a new phase marked by fragmentation, regional trade blocks, and protectionism. Investors, asset managers, and governments must adapt their strategies to a world where resilience, flexibility, and geopolitical foresight are more critical than ever.

As the full impact of new trade policies plays out, active investing, supply chain reconfiguration, and a focus on diversified asset classes may be key to long-term success.

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Source: CNBC