President Trump’s sweeping tariffs will have far-reaching consequences for our investments – but not all will be affected equally.
All countries will face tariffs of at least 10 per cent when exporting goods to the US, but some will have more than 50 per cent. As these differences open up, picking the right countries to invest in will become increasingly important.
Investing country by country may prove a useful strategy in this environment. After all, global funds or those that cover large regions, such as emerging or developed markets, contain countries that could be badly hit as well as those set to fare better.
Country-specific funds allow you to invest with greater precision based on how you think the tariffs will play out around the world.
That’s why Wealth has asked top investing experts which countries they believe are set to fare well in this new climate – and which could face a tougher time.
We also asked for expert advice on an Exchange-Traded Fund (ETF) for each country, as these are a low-cost way of investing in companies in a single country.
They tend to track an index of a country’s biggest businesses and they issue shares that can be easily bought or sold on a stock exchange.
ETFs can be held in a tax-efficient Isa or pension, or in a general investment account. You can buy them through all major DIY investment platforms such as Hargreaves Lansdown and Fidelity.
President Trump’s sweeping tariffs will have far-reaching consequences for our investments – but not all will be affected equally
Our experts have shared their immediate reaction in wake of the tariffs.
However, it is too early to say precisely how it will play out as this will be affected, for example, by how countries retaliate and whether Trump sticks to his plans in full.
INDIA
An eye-watering 27 per cent tariff has been placed on India. However, this is still considerably lower than those imposed on countries such as China (54 per cent), Vietnam (46 per cent) and Bangladesh (37 per cent). This could give India an advantage, according to the Delhi-based think tank Global Trade Research Initiative.
Furthermore, much of the growth potential in India comes not from its trading outlook but by its own social changes.
Tom Bigley, fund analyst at investment platform Interactive Investor, reckons now is a good time to step in. He’s excited by India’s emerging young middle class. ‘They’re young and vibrant and by 2047 these natural consumers will make up 60 per cent of the population, up from 31 per cent today,’ he says.
A man reads The Economic Times, an Indian English-language business-focused daily newspaper, outside the stock exchange in Mumbai
Domestic consumption drives India’s growth, and United Nations agency the International Monetary Fund (IMF) reckons its economy will grow 6.5 per cent in 2025 and 2026, outpacing China.
‘The Indian market offers a diverse range of companies with good fundamentals that can take advantage of the untapped growth potential,’ Bigley adds.
The world’s most populous country has seen its stock market decline recently due to concerns about slowing economic growth and global volatility. Indian stocks were down 20 per cent between September 2024 and February.
Yet despite this, India isn’t a bargain, so some believe there’s not enough potential for growth.
Darius McDermott, managing director at Fund Calibre, says: ‘High valuations of some of India’s companies suggests that investors may have got carried away with their potential.’
ETFs: Bigley suggests the iShares MSCI India ETF, which tracks
an index of large and mid-sized companies. Almost a third of the fund is invested in financial firms, followed by consumer goods.
Outlook for investors: 3/5
GERMANY
Although Trump is imposing a blanket 20 per cent tariff on European goods and services, not all countries will be affected equally.
Those with large car makers such as Germany, for example, will be particularly affected by Trump’s 25 per cent tariff on imported vehicles.
Despite this, Germany’s decision to increase spending in defence and infrastructure could create opportunities in the country.
Germany with its large car makers will be particularly affected by Trump’s 25 per cent tariff on imported vehicles, but it’s decision to increase spending in defence and infrastructure could create opportunities in the country
Its so-called ‘fiscal bazooka’ – in other words a decision to loosen its previously strict economic rules to increase spending in these key areas – could unlock as much as €1trillion of spending.
McDermott says that European market confidence is ‘on the rise’ thanks to Germany’s decision, adding that the reforms will ‘break down bureaucratic red tape’.
‘Trump’s tariffs and broader geopolitical uncertainties still cast a shadow,’ he adds. ‘But encouragingly, the market’s resilience suggests investors are less worried than expected.’
For those looking for an income from their investments, there is also good news amidst the gloom.
The latest edition of Allianz’s Dividend Study suggests that dividends from German companies are expected to increase from around €57billion in 2024 to around €63billion this year and could reach €70billion in 2026.
ETFs: Investment firm Vanguard offers a fund called Germany All Cap, which costs 0.1 per cent in ongoing charges. This invests in both large and small companies. It is up 20 per cent this year and nearly 90 per cent over five years.
Outlook for investors: 4/5
THE UK
Trump hit the UK with tariffs at the lowest rate of 10 per cent.
Edward Allen, director at Tyndall Investment Management, says this is further evidence that since Trump moved into the White House the UK has been regarded as a ‘safe port in a storm’ and has seen world-leading returns.
‘This matters more to international investors than anything Rachel Reeves might say or do,’ he says. However, the tariffs and a poor economic climate still weigh on the UK and investors have been disappointed in recent years.
Since Trump moved into the White House the UK has been regarded as a ‘safe port in a storm’ and has seen world-leading returns
Jason Hollands, managing director at DIY fund group BestInvest, says that he is ‘cautious’ on UK stocks, particularly those that gain most of their revenues from domestic customers.
‘Higher employment costs are set to bite as the increase to employer’s National Insurance costs kicks in,’ he says.
‘The UK’s growth outlook is very weak, in large part due to the way the Chancellor hammered business sentiment last year with her tax rises and constant talking down of the British economy.’
ETFs: A simple FTSE 100 tracker will give you exposure to the 100 largest companies in the UK. Two cheap ones are run by iShares (its FTSE 100 ETF) and HSBC. The Amundi UK Equity All Cap is even cheaper but tracks a different index – the Morningstar UK index which tracks 300 rather than 100 companies, which means that investors hold medium-sized as well as large companies.
Outlook for investors: 3/5
THE U.S.
Although Trump’s tariffs agenda is designed to boost the US economy, there is no guarantee that it will – and if it does it could take some years.
Richard de Lisle, manager of the VT De Lisle America fund, says: ‘The problem is the initial effect is price rises for US consumers, which will hurt demand and weaken the US economic outlook.’
However, he adds that it should be a relative positive for small firms that focus on a domestic market that require low imports and exports.
President Trump announces his global tariffs on ‘liberation day’, at the White House on April 2
Victoria Haslam, head of fund research at Hargreaves Lansdown, agrees, saying: ‘Smaller companies have been caught up in the wider market volatility and have performed worse than their larger counterparts. Once tariffs are in place, we think the more positive story could start to come through.’
However, Laith Khalaf, head of investment analysis at AJ Bell, says you should think carefully before buying US funds as there is a good chance you already hold a high proportion in your portfolio.
‘The average global tracker fund has around three-quarters invested in US stocks,’ he says. ‘It’s still quite a lot of eggs in one regional basket.’
ETFs: The State Street S&P 500 ETF is one of the cheapest ways to invest in US stocks and tracks 100 of the S&P 500 biggest stocks. The version in British pounds is down 7 per cent in the last three months, but up 9.5 per cent in a year.
iShares has an exchange traded fund that tracks smaller US stocks – the S&P SmallCap 600. It’s down 3.7 per cent this year, and 12.5 per cent in the last three months.
Outlook for investors: 2/5 – but 3/5 for smaller US stocks which are cheaper.
VIETNAM
One of the ‘frontier markets’ – seen as even riskier than the emerging markets – Vietnam might add some excitement to your portfolio. However, it will have to deal with the fallout of Trump’s decision to slap a massive 46 per cent tariff on its exports.
Vietnam-focused fund manager Dragon Capital estimates that the tariffs will hit the country’s GDP by between 1.4 and 2 per cent.
However, Alex Everett, from Vietnam Enterprise Investment Management, says that the tariffs are a ‘stress test not an end game’ and adds that the relative impact when viewed against Vietnam’s competitiveness elsewhere is ‘likely manageable’.
Meanwhile Allen, at Tyndall Investment Management, described the country’s stock market as ‘cheap and fast growing’.
ETFs: XTrackers offers a FTSE Vietnam ETF, but it is relatively expensive for an ETF at 0.85 per cent. It is also synthetic, meaning it replicates the performance of the exchange through holding financial instruments rather than the stocks themselves.
An alternative is investment trust VEIL (Vietnamese Enterprise Investments Limited), the largest Vietnamese trust listed in London.
Before Trump’s announcement it had returned 2.7 per cent in the last year and almost 79 per cent over five years, but the 6.6 per cent drop the day after the speech tells you everything you need to know about how bumpy a ride this would be.
Outlook for investors: 2/5
CHINA
Trump hit China with a 54 per cent tariff and it is firmly in the crosshairs of a US trade war.
China’s economy was already struggling since the pandemic and many investors give it a wide berth. However, the country has staged an impressive stock market comeback in 2025 and some believe it has further to go.
China’s economy was already and many investors give it a wide berth. However, the country has staged an impressive stock market comeback in 2025 and some believe it has further to go
‘The real excitement comes from the country’s rapid pace of technological innovation, with the communist party’s support for technology signalling more innovation ahead,’ says McDermott.
‘China’s impressive track record in electric vehicles, quantum computing, batteries and robotics suggests AI tool DeepSeek is just the beginning.’
Fox says the tariffs slapped on China by Trump will force it to seek alliances elsewhere.
‘Countries such as China, Japan and South Korea – historically foes – are now coming together to respond to the US,’ he says. ‘As these and other Asian countries begin to trade more with each other it will create new economic linkages and opportunities for companies which operate there.’
ETFs: Fidelity Index Emerging Markets fund, which has a low 0.2 per cent ongoing fee, is up 9 per cent over a year and 30.9 per cent of the fund is in Chinese companies. It also has holdings in Taiwan, India and South Korea.
Outlook for investors: 3/5
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