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It's been another 'Manic Monday' for savers and financiers.

Having gotten up at the start of last week to the game-changing news that an unknown Chinese start-up had actually developed a low-cost artificial intelligence (AI) chatbot, they found out over the weekend that Donald Trump actually was going to perform his threat of launching an all-out trade war.

The US President's choice to slap a 25 per cent tariff on goods imported from Canada and Mexico, and a ten percent tax on deliveries from China, sent out stock markets into another tailspin, just as they were recuperating from last week's rout.

But whereas that sell-off was mainly restricted to AI and other technology stocks, this time the results of a potentially drawn-out trade war might be far more destructive and prevalent, and perhaps plunge the global economy - including the UK - into a depression.

And the decision to delay the tariffs on Mexico for one month used just partial respite on global markets.

So how should British financiers play this extremely unstable and unpredictable scenario? What are the sectors and assets to prevent, and who or what might emerge as winners?

In its simplest type, a tariff is a tax enforced by one nation on products imported from another.

Crucially, the duty is not paid by the foreign business exporting but by the receiving service, which pays the levy to its federal government, supplying it with beneficial tax earnings.

President Donald Trump speaking to press reporters in Washington today after Air Force One touched down at Joint Base Andrews

These could be worth up to $250billion a year, or 0.8 per cent of US GDP, according to consultants at Capital Economics.

Canada, Mexico and China together represent $1.3 trillion - or 42 per cent - of the $3.1 trillion of products imported into the US in 2023.

Most financial experts dislike tariffs, mainly because they trigger inflation when business pass on their increased import costs to consumers, sending out prices higher.

But Mr Trump likes them - he has explained tariff as 'the most lovely word in the dictionary'.

In his current election campaign, Mr Trump made clear of his plan to enforce import taxes on neighbouring nations unless they suppressed the prohibited flow of drugs and migrants into the US.

Next in Mr Trump's sights is the European Union, where he's said tariffs will 'certainly occur' - and possibly the UK.

The US President states Britain is 'escape of line' but an offer 'can be worked out'.

Nobody ought to be shocked the US President has actually decided to shoot first and ask questions later on.

Trade delicate business in Europe were likewise struck by Mr Trump's tariffs, including German carmakers Volkswagen and BMW

Shares in European consumer items business such as drinks huge Diageo, that makes Guinness, fell sharply amidst of greater expenses for their items

What matters now is how other nations respond.

Canada, Mexico and China have already retaliated in kind, prompting fears of a tit-for-tat escalation that could swallow up the whole worldwide economy if others do the same.

Mr Trump yields that Americans will bear some 'short-term' pain from his sweeping tariffs. 'But long term the United States has been ripped off by practically every country on the planet,' he included.

Mr Trump states the tariffs enforced by previous US President William McKinley in 1890 made America flourishing, introducing a 'golden era' when the US overtook Britain as the world's biggest economy. He wants to duplicate that formula to 'make America fantastic again'.

But specialists state he runs the risk of a re-run of the Smoot-Hawley Tariff Act of 1930 - a devastating procedure introduced simply after the Wall Street stock exchange crash. It raised tariffs on a broad swathe of products imported into the US, leading to a collapse in international trade and worsening the effects of the Great Depression.

'The lessons from history are clear: protectionist policies rarely deliver the intended benefits,' says Nigel Green, primary executive of wealth supervisor deVere Group.

Rising expenses, inflationary pressures and disrupted worldwide supply chains - which are much more inter-connected today than they were a century ago - will affect companies and consumers alike, he included.

'The Smoot-Hawley tariffs intensified the Great Depression by stifling global trade, and today's tariffs risk setting off the same devastating cycle,' Mr Green includes.

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Perhaps the very best historic guide to how Mr Trump's trade policy will impact investors is from his first term in the White House.

'Trump's launch of tariffs in 2018 did raise incomes for America, however US business earnings took a hit that year and the S&P 500 index fell by a fifth, so markets have actually not surprisingly taken shock this time around,' says Russ Mould, director at investment platform AJ Bell.

The bright side is that inflation didn't spike in the consequences, which might 'assuage current financial market fears that greater tariffs will imply higher prices and higher costs will suggest greater rates of interest,' Mr Mould includes.

The reason prices didn't leap was 'since customers and companies declined to pay them and photorum.eclat-mauve.fr looked for less expensive choices - which is exactly the Trump strategy this time around', Mr Mould explains. 'American importers and foreign sellers into the US chosen to take the hit on margin and did not pass on the cost effect of the tariffs.'

Simply put, business absorbed the greater expenses from tariffs at the expense of their revenues and sparing consumers price rises.

So will it be various this time round?

'It is difficult to see how an escalation of trade stress can do any good, to anybody, at least over the longer run,' says Inga Fechner, senior economist at investment bank ING. 'Economically speaking, intensifying trade tensions are a lose-lose situation for all countries involved.'

The effect of a global trade war might be devastating if targeted economies retaliate, costs rise, trade fades and growth stalls or falls. In such a situation, rate of interest could either increase, to suppress greater inflation, or fall, to improve drooping growth.

The agreement amongst specialists is that tariffs will imply the cost of obtaining stays greater for longer to tame resurgent inflation, but the fact is nobody really understands.

Tariffs might likewise result in a falling oil rate - as need from industry and consumers for dearer items sags - though a barrel of crude was trading greater on Monday amidst fears that North American products may be interrupted, causing lacks.

In either case a dramatic drop in the oil rate might not be enough to save the day.

'Unless oil costs stop by 80 percent to $15 a barrel it is not likely lower energy expenses will balance out the results of tariffs and existing inflation,' states Adam Kobeissi, creator of a prominent financier newsletter.

Investors are playing the 'Trump tariff trade' by switching out of risky properties and into conventional safe houses - a trend professionals say is likely to continue while uncertainty continues.

Among the hardest struck are microchip and innovation stocks such as Nvidia, which fell 7 per cent, and UK-based Arm, which is off 6 per cent, as monetary markets brace for retaliation from China and curbs on semiconductor sales.

Other trade-sensitive business were also struck. Shares in German carmakers Volkswagen and BMW and durable goods companies such as drinks huge Diageo fell sharply in the middle of worries of higher costs for their products.

But the most significant losers have been cryptocurrencies, which skyrocketed when Mr Trump won the US election however are now falling back to earth.

At $94,000, Bitcoin is down 15 percent from its recent all-time high, while Ethereum - another major cryptocurrency - fell by more than a third in the 60 hours since news of the Trump trade wars struck the headings.

Crypto has taken a hit because financiers believe Mr Trump's tariffs will sustain inflation, which in turn might cause the US main bank, the Federal Reserve, to keep interest rates at their existing levels or even increase them. The effect tariffs might have on the course of rates of interest is uncertain. However, higher interest rates make crypto, which does not produce an income, less appealing to financiers than when rates are low.

As investors flee these highly unpredictable assets they have actually stacked into traditionally much safer bets such as gold, which is trading at a record high of $2,800 an ounce, and the dollar, which surged against significant currencies the other day.

Experts state the dollar's strength is really an advantage for the FTSE 100 due to the fact that a lot of the British business in the index make a great deal of their cash in the US currency, implying they benefit when earnings are translated into sterling.

The FTSE 100 fell the other day however by less than much of the major indices.

It is not all doom and gloom.

'One huge hope is that the tariffs do not last, while another is that the US Federal Reserve assists with some interest rate cuts, something for which Trump is currently calling,' says AJ Bell's Mr Mould.

Traders expect the Bank of England to cut rates this week by a quarter of a percentage point to 4.5 per cent, while the opportunity of three or more rate cuts later this year have actually risen in the wake of the trade war shock.

Whenever stock markets wobble it is appealing to stress and offer, however holding your nerve typically pays dividends, experts say.

'History also shows that volatility types chance,' states deVere's Mr Green.

'Those who hesitate risk being captured on the wrong side of market motions. But for those who gain from past disruptions and take decisive action, this duration of volatility might provide some of the very best opportunities in years.'

Among the sectors Mr Green likes are European banks, due to the fact that their shares are trading at fairly low costs and rate of interest in the eurozone are lower than in other places. 'Defence stocks, such as BAE Systems, are likewise appealing since they will offer a steady return,' he adds.

Investors must not hurry to sell while the photo is cloudy and can keep an eye out for potential bargains. One method is to invest routine month-to-month quantities into shares or funds rather than large swelling sums. That way you decrease the risk of bad timing and, when markets fall, you can buy more shares for your money so, as and when rates rise again, you benefit.