Trump tariffs: How investors can navigate the big reset

Across geographies, investors are watching valuations tumble, driven by a once-in-a-generation reset.

By Ram Medury

Let’s start with the elephant in the room: global markets have taken a beating, rattled by a sharp selloff triggered in part by renewed US President Donald Trump’s tariffs and rising fears of a broader trade conflict.

Across geographies, investors are watching valuations tumble, driven by a once-in-a-generation reset. The world is learning to live without the old comforts of globalisation. Supply chains are splintering, countries are turning inward, and cheap capital is no longer freely available. So, what does all this mean for the Indian economy, and more importantly, for your portfolio?

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As per the Economic Survey 2024-25, India’s GDP growth is pegged at 6.3 percent to 6.8 percent for FY 2025-26. That’s slower than last year’s 8.2 percent, but in a world recalibrating to the end of globalisation, it’s still a strong showing. This isn’t a time to chase momentum. It’s a time to build conviction. Here are five ideas that can be also executed in your investment portfolios.

1. The slowdown isn't all bad news

A slower GDP doesn’t mean the economy is struggling. Like a runner pacing himself for a marathon. India is using this phase to realign priorities, focusing on long-term infrastructure creation while also nudging demand through targeted tax cuts and employment schemes. Fiscal discipline is holding up well too, with the Q2 FY25 deficit at 4.4 percent of GDP. This gives the government room to support growth if needed.

2. Look for where the resilience is coming from

The rural economy is doing surprisingly well, thanks to a decent monsoon and a healthy kharif crop. This is driving FMCG consumption and reducing dependency on schemes like MGNREGA. The services sector continues to shine, with exports in areas like defence, insurance, and finance gaining steam. High-value manufacturing, especially electronics and chemicals, is quietly becoming a major export story, led by MSMEs that have embraced the Roots & Wings philosophy. Strong balance sheets, low debt, and scalable business models are now more important than ever.

3. Risks you shouldn’t ignore

Inflation is still sticky. The RBI may keep interest rates higher for longer. And global trade is unpredictable, thanks to geopolitics and friend-shoring. If shipping lanes are disrupted or input costs spike, Indian exports could suffer. As an investment advisor, I tell clients that risk isn’t about predicting the next crisis, it’s about being ready before it hits.

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4. How investors should play this cycle

Asset allocation becomes critical. Use the Liquidity-Safety-Growth (LSG) framework, prioritise liquidity for near-term needs, safety through government and AAA+ bonds, and growth via equity investments. Within equities, focus on sectors with high domestic demand and strong pricing power. If you can't track equities on your own, use a good portfolio management service (PMS) that follows disciplined strategies rather than chasing flavour-of-the-month stocks.

5. Private capex revival is the wildcard

The Economic Survey 2024-25 highlights that private sector investments need to accelerate if India aims to stay on course for the Viksit Bharat 2047 vision. This won’t happen unless the government makes bold moves in labour, land, and capital market reforms. Reforms aren't just headlines, they’re signals that build confidence. India must be prepared for facing a glut of Chinese exports simply because China has built excess capacity which is under duress due to US tariffs.

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To sum up, the global reset is real. But India is not standing still. For long-term investors, this is a time to build positions in businesses that have both Roots (strong financials, ethical management) and Wings (growth track record + potential, market leadership). Warren Buffett, the Oracle of Omaha said, “Only when the tide goes out do you discover who’s been swimming naked.” The tide is already receding. This is the time to make sure your investments are wearing strong fundamentals.

The writer is Founder and CEO of Maxiom Wealth

Disclaimer: The views expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.