Donald Trump’s last-minute decision to hit the brakes on sweeping new tariffs against Mexico and Canada may have given businesses a short reprieve, but markets remain on edge.

The threat of trade war looms large, and investors should not be lulled into a false sense of security, warns Jake McLaughlin, Executive Director of deVere Portugal, part of the world’s largest independent financial advisory and asset management organizations.

“This is a delay, not a resolution,” McLaughlin says. “The unpredictability we’re seeing in trade policy is exactly the kind of risk that rattles markets. Investors need to be proactive, not reactive, in ensuring their portfolios are protected.”

Trump’s move, announced after urgent talks with Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum, has temporarily suspended new duties that were set to disrupt North American trade.

But with a mere month’s grace, before the issue resurfaces, global investors are left to navigate a landscape fraught with uncertainty.

Markets reflected that unease. Equities swung wildly in the wake of the announcement, while the dollar wobbled as traders tried to gauge the broader economic fallout. The temporary reprieve has also cast fresh doubts over whether Trump’s tariff threats are a genuine long-term strategy or merely a short-term bargaining chip.

McLaughlin warns that repeated threats without follow-through could backfire. “At some point, either these tariffs happen, or the rhetoric starts losing credibility. Either way, the instability damages investor confidence, and that’s dangerous.”

While Mexico and Canada have escaped for now, the broader trade war with China rages on, with new tariffs set to hit Chinese goods on Tuesday. That escalation keeps supply chains in turmoil and investment decision-making clouded by risk.

For businesses reliant on cross-border commerce, the stakes couldn’t be higher. Manufacturers are bracing for increased costs, firms with global supply chains are struggling with uncertainty, and inflation risks are mounting as trade disruptions threaten to push prices higher.

“This doesn’t just affect big corporations,” McLaughlin points out. “It filters down to consumers, to pension funds, to everyday investors.”

The Mexican government has responded by agreeing to deploy more troops to its northern border, a sign that Trump’s tariffs are being used as leverage for political concessions as much as economic ones. But political wins won’t necessarily calm the markets. Investors are already repositioning portfolios in anticipation of further trade turbulence.

So, what should investors do in the face of such unpredictability? McLaughlin is unequivocal: seek expert advice.

“Now is not the time to be going it alone,” he stresses. “Trade policy uncertainty is one of the biggest economic risks out there right now, and it requires a strategic, well-diversified approach.”

He points to the need for geographic diversification, ensuring exposure beyond the most vulnerable markets, and hedging against currency fluctuations.

“This isn’t about making rash decisions—it’s about having a plan that accounts for these kinds of disruptions.”

History shows that markets can weather trade wars, but the key is preparation. During previous tariff escalations, sectors like tech and consumer goods bore the brunt, while defensive assets like gold and certain emerging markets proved more resilient. Understanding these dynamics is crucial for investors aiming to protect and grow their wealth.

“The worst move right now is doing nothing,” says McLaughlin.

“Investors need to be assessing their risk exposure, stress-testing their portfolios, and ensuring they have the right strategies in place to mitigate the fallout from ongoing trade uncertainty.”

As Trump’s tariff drama continues to unfold, one thing is clear: market volatility isn’t going away anytime soon. Investors who take decisive steps now will be far better positioned to ride out the storm than those who wait for clarity that may never come.

To see how you can protect your investments from the Tariffs, join our free webinar on Friday 7th February. https://www.devere-group.com/the-dramatic-effect-of-us-tariffs-on-investment/?utm_content=1140x250

You can also contact Jake with any questions here: jake.mclaughlin@devere-portugal.pt, the deVere Portugal Office + 351 22 110 9071 or book a meeting with him here https://calendly.com/jake-mclaughlin/review