How to play the tariff wars and deglobalization: resilience, sovereignty & reshoring, China

Three type of stocks to ride the Golden Age of Uncertainty

Liberation Day has arrived and the world has tipped into a golden age of uncertainty.

I believe that investors should understand that this administration has a principled view about resetting globalisation to bring back manufacturing jobs to the US and they want to reset the fiscal and monetary balance in the US, no matter the cost.

As investors panic, I think you should remain calm and focus on doing your homework and understanding what are the greatest businesses and trends that will deliver the value for the next decades and use this chaos to build positions in them.

We are entering the age of resilience and sovereignty, a subject I have spent years researching and investing in.

Twice a week, I will release deep dives into stocks and sectors that fit into the three themes that I see winning in this age of tariffs and deglobalization: resilience, sovereignty & reshoring, China. I will then deep dive into the opportunities in the AI data center value chain.

Take advantage of this once in a generation opportunity to build long term wealth by investing in great stocks that will deliver returns for your portfolio for years to come.

You can already read my first 9 deep dives, all of which I see as winners in this new world of tariffs and deglobalization:

• ASML (reshoring & China idea): The most innovative company in the world will 2.5x its EPS by 2030.

• LKQ (resilience idea): The most defensive business in the auto industry is a tariff winner and could become a compounder.

• Atlas Copco (resilience & reshoring idea): The best industrials business in the world is on sale, extremely resilient and will benefit from US reshoring.

• Badger Meter (resilience idea): The perfect business in the perfect end market, water meters are the definition of resilience.

• Knorr Bremse (resilience idea): Who knew making brakes was this lucrative? Rerating with self help story and upside from German infra plan.

• Flex (reshoring idea): The electronics manufacturing giant building Nvidia’s servers and enabling reshoring is becoming a better business.

• Itron (resilience & reshoring idea): Riding the grid investment super cycle and enabling smart grids.

• Roper (resilience idea): A resilient cashflow compounder in the software space with inflecting growth.

• RELX (resilience idea): The company to own forever – one of the very best businesses on Earth.

What happened?

• Baseline tariff of 10% on imports from all countries. The reciprocal tariffs will range from 10-50% (>10% for around 60 countries). 20% tariff on EU and 10% UK, 54% cumulative tariff (34% on top of 20%) on China, could go even higher if their is a retaliation, South East Asia hit with tariffs of almost 50%, Mexico and Canada will doge reciprocal for now.

• Existing tariffs will stay in place (China, Steel & Aluminium, Cars) but cars spared of extra reciprocal tariffs.

• Certain exemptions to tariffs (for now): pharmaceuticals, semiconductors, lumber, metal and auto parts under USMCA, energy and minerals not available in the US.

• Levies will go into affect within days (April 5 and April 9).

• What is the market doing: sell first and ask questions later in a risk off environment.

Conclusion: This is the worst case scenario, effective tariffs on US imports are rising 10x (from 2% to 22%), a level not seen since the early 1900s. We are going into a full blown commercial war (with EU, Asia and China retaliation likely escalating the uncertainty). Countries are likely to negotiate and central banks and governments will have to respond globally to offset the growth shock.

What is next?

I repeat that I think it is paramount for you to understand that this administration, and Trump in particular, has a deeply held view about resetting globalisation to bring back manufacturing jobs to the US. They also want to reset/restructure the fiscal and monetary balance in US.

But before the hoped golden age there will be a golden age of maximum uncertainty (we have no precedent for what is happening), which is causing discount rates and risk premiums to go up and multiples to come down. Markets are already down >10% and in free fall. Consumer confidence is going down (people afraid for their job security), airlines/staples (the fist indicators of consumer confidence) are flagging softening US consumer demand, business conditions are also worsening.

The second leg of uncertainty is linked to the rising risk of recession and slowing growth. Their is a growing risk of recession in 2026, 50% according to certain analysts, if the tariffs stay in place (gross impact, before stimulus/fiscal expansion, would be 1-2% less growth for the US, 2% for China and 0.3-0.5% for the EU, will impact investments globally).

Investors have know acknowledged the uncertainty around tariffs, inflation and growth. But no one knows when the clearing event will be. It is not yet clear how long the tariffs will last and if they can be negotiated partly away. But escalation from retaliatory tariffs coming from the EU, Asia and China are likely.

Patience will be needed as management teams develop mitigation strategies and investors digest macro/company specific implications.

How to think about and play the tariffs and the deglobalization of the world as long term equity investors ?