Banque Syz: Possible surprise on the market in 2025 – change from "Trump 2.0" to "Trump 2.1"

• Banque Syz bullish on risk assets in 2025
• Trump threatens high tariffs for his new term
• Change to “Trump 2.1” possible?

Banque Syz is optimistic about risk assets in 2025. This assessment is supported “by the expectation of a resilient global economy, strong double-digit profit growth for S&P companies and lower real interest rates in industrialized countries,” as the bank writes. But despite the positive outlook, challenges and uncertainties may remain, meaning “the road ahead may not be entirely smooth for global equities,” said a report in which the bank outlined 10 possible surprises that could impact markets in 2025 , identified.

Trump threatens high tariffs

One of these potential market-moving surprises in 2025 would be the shift from “Trump 2.0” to “Trump 2.1,” according to Banque Syz.

So far it is assumed that US President-elect Donald Trump will once again focus on imposing tariffs. This signals “a seismic shift that could redefine the global economic landscape,” impacting not just the US, “but all interconnected economies,” Banque Syz reports. Trump has already announced, among other things, tariffs of 20 percent on imports from the EU, 25 percent on all goods from Mexico and Canada and even 60 percent on goods from China.

Possible surprise: “Trump 2.1”

But what if Trump changed his mind and took “a more conciliatory stance toward trading partners”? Concerns about the impact of tariffs on inflation could prompt him to make such a shift from “Trump 2.0” to “Trump 2.1,” according to Banque Syz.

In this surprise scenario from the bank, Trump, after imposing new tariffs early in his presidency, would begin “talks with China on a comprehensive trade deal between the world’s two largest economies.” China, which is struggling with “weak economic growth and structural challenges,” could be willing to make concessions.

The People’s Republic has already begun to focus its growth on domestic demand, reports Banque Syz, “and a trade agreement with the USA can serve this purpose.” China is also better positioned because it has reduced its dependence on US exports. Its trade balance worldwide (excluding the USA and the EU) now corresponds to the trade balance with the USA alone.

According to Banque Syz, in the event of a surprise change from Donald Trump, tariffs on various goods would be eliminated and trade between the US and China would increase again, while geopolitical and economic tensions between the US and China would decrease. As a result, the EU would pressure China to negotiate a similar trade agreement. In the US, easing imported inflation pressures would contribute to a decline in interest rates, according to Banque Syz. Meanwhile, the Chinese stock market would become attractive again for institutional investors in the USA and could therefore recover after a long period of weak performance.

Editorial team finanzen.net

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