As global trade tensions resurface in 2025, the prospect of a new wave of tariffs is beginning to reshape the conversation among investors, policymakers, and business leaders. While some view these protectionist measures as a strategic pivot to support domestic industries, others warn of disruption, inflation, and economic slowdown. As the world prepares for the potential consequences of a tariff-heavy landscape, it’s worth asking: which sectors might benefit—and which ones are at risk of being left behind?
The Economic Backdrop: A Fragile Global Recovery
In early 2025, global markets are delicately balancing between moderate growth and persistent structural headwinds. The International Monetary Fund (IMF) forecasts global GDP growth of just 2.7% this year—slightly below the long-term average—due to lingering inflation, elevated interest rates, and geopolitical instability. Supply chain bottlenecks, exacerbated by conflicts in Eastern Europe and shipping challenges in the Red Sea, continue to hamper global trade efficiency.
Against this backdrop, the U.S. is considering—or already implementing—new tariffs aimed at “leveling the playing field” against perceived unfair competition, particularly from China. This echoes the first round of tariffs imposed between 2018 and 2020, which ultimately affected over $500 billion in goods globally.
Potential Winners: Domestic Producers and Strategic Industries
Historically, tariffs have benefited select domestic industries by providing a competitive edge over cheaper imports. In 2018, U.S. steel and aluminum producers saw production increases of over 5%, and stock prices in some cases rose double digits within months of the new duties being announced.
In 2025, we could see similar upside for sectors aligned with national interests or those that serve as pillars of domestic supply chains. Companies in defense, semiconductors, construction materials, and even agriculture may see a boost as governments shift procurement preferences and consumers respond to import restrictions. For example, U.S. chip manufacturers such as Intel or Micron could receive indirect benefits from tariffs aimed at Asian semiconductor imports, especially as Washington seeks to bolster domestic capacity under initiatives like the CHIPS Act.
Additionally, firms involved in renewable energy—solar panel production, battery manufacturing, and rare earth processing—could become strategic winners. With the U.S. and Europe pushing for energy independence and resilience, tariffs may serve to protect early-stage green industries from foreign pricing pressures.
Possible Losers: Multinationals, Consumers, and Emerging Markets
On the flip side, companies heavily reliant on international supply chains and export markets could face a rougher road. Automakers, for instance, have global production footprints and could see rising costs due to tariffs on key components. Tech giants like Apple or Dell, which depend on Chinese manufacturing, may have to navigate both higher production expenses and potential retaliatory tariffs.
It’s not just businesses that will feel the sting. Tariffs tend to raise consumer prices. During the previous tariff conflict, studies showed that nearly 100% of the costs of tariffs imposed on Chinese goods were passed on to U.S. importers and consumers. A similar pattern in 2025 could reignite inflationary pressures at a time when central banks are trying to ease interest rates without triggering a rebound in prices.
Emerging markets, too, may find themselves collateral damage in a renewed trade war. Many of these economies rely on export-driven growth, and disruptions in global demand could derail their recovery. The MSCI Emerging Markets Index already dropped 1.8% in February after early tariff announcements—suggesting nervousness around the broader consequences.
Market Behavior and Investor Strategy in a Time of Flux
Financial markets, ever forward-looking, have begun to price in both the risks and opportunities of a more protectionist world. Equities in the materials and industrials sectors have outperformed the broader S&P 500 in Q1 2025, up 6.4% and 5.2% respectively, while consumer discretionary stocks have lagged behind, reflecting worries about future price pressures and shrinking margins.
Meanwhile, commodities such as copper and aluminum—often linked to infrastructure spending and manufacturing—are seeing upward price pressure amid expectations of renewed domestic investment. Gold has also spiked past $2,150 per ounce as investors hedge against geopolitical uncertainty and currency volatility.
In this context, investors may consider tilting their portfolios toward companies with lower international exposure, strong pricing power, or ties to government-backed projects. At the same time, staying diversified across asset classes—including commodities, inflation-protected bonds, and select international equities—can help mitigate volatility.
Navigating a Shifting Trade Landscape
The possibility of a renewed tariff war in 2025 is not just a geopolitical issue—it’s a strategic inflection point for global markets. Whether these measures lead to a realignment of global trade or an economic stumble depends on the breadth of implementation and the global response.
What is certain is that the investment environment is changing. The winners may not be the flashiest stocks, but rather those quietly positioned in essential industries or aligned with national priorities. The losers, conversely, may be those that fail to adapt to a world where globalization is no longer a given.
As we move deeper into 2025, investors who stay informed and agile will be best placed to manage risk—and uncover new opportunities—in the evolving global economic order.
