Investors See Trade War as Top 2025 Risk

A fresh Bank of America survey reveals that 42 percent of investors now rank a global trade war as the leading threat to risky assets in 2025 a sharp rise from 30 percent at the year’s start. This growing unease stems from escalating tariff threats and trade disputes led by the United States which could destabilize markets and choke economic growth worldwide. The shift in sentiment underscores fears that protectionist policies might unravel decades of globalization just as investors navigate an already volatile landscape.

The survey conducted among fund managers and institutional players points to recent moves by President Donald Trump as a catalyst for the heightened concern. His administration’s plans to impose steep tariffs on imports from Canada China and other major partners have rattled markets and sparked talk of retaliation. Investors worry that a cycle of tit-for-tat measures could hammer stocks commodities and other high-risk holdings already bruised by inflation and geopolitical strife.

Global trade has long fueled economic expansion but cracks are showing as nations prioritize domestic industries over open borders. The survey notes that 2025 could see supply chains buckle under new duties driving up costs for businesses and consumers alike. Progressive economists argue that such policies disproportionately harm working families who bear the brunt of pricier goods and job losses in export-reliant sectors.

Bank of America’s analysts highlight that the 42 percent figure marks a tipping point with trade war fears now outpacing other risks like recession or monetary tightening. Respondents flagged the potential for currency wars as a secondary fallout with countries devaluing to stay competitive. This could further erode investor confidence in emerging markets already vulnerable to capital flight and debt pressures.

The U.S.-China rivalry looms large in the survey with investors bracing for a showdown as Beijing vows to counter any new tariffs with its own economic leverage. Trade tensions with Canada and the European Union also feature prominently as allies signal they won’t absorb U.S. duties without a fight. This web of conflicts threatens to fracture alliances and drag down global growth at a time when cooperation is sorely needed.

Financial markets have already priced in some of the uncertainty with stock indexes dipping and safe-haven assets like gold gaining ground in recent weeks. The survey suggests that portfolios are shifting toward defensive plays as managers seek to shield gains from a potential trade-fueled downturn. Yet the unpredictability of government actions keeps even seasoned investors on edge.

Advocates for free trade warn that the survey reflects a dangerous slide toward isolationism that could take years to reverse. They urge dialogue and multilateral agreements to head off the worst outcomes while critics of globalization cheer the focus on national resilience. The divide leaves policymakers with little room to maneuver as they juggle economic stability and political demands.

With 2025 fast approaching the Bank of America survey signals that investors are battening down the hatches for a turbulent year. The specter of a trade war looms as a test of global resolve with trillions in assets hanging in the balance. Whether diplomacy can avert the storm remains unclear but for now the mood among the world’s money managers is one of cautious dread.