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

Having awakened at the start of recently to the game-changing news that an unidentified Chinese start-up had developed a cheap synthetic intelligence (AI) chatbot, they found out over the weekend that Donald Trump truly was going to carry out his risk of releasing a full-scale trade war.

The US President's decision to slap a 25 percent 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 recovering from recently's rout.

But whereas that sell-off was mainly confined to AI and other technology stocks, this time the results of a potentially lengthy trade war could be far more harmful and extensive, and possibly plunge the global economy - including the UK - into a depression.

And the decision to postpone the tariffs on Mexico for one month used only partial respite on international markets.

So how should British investors play this extremely unpredictable and unpredictable situation? What are the sectors and properties to avoid, and who or what might become winners?

In its easiest form, a tariff is a tax imposed by one country on goods imported from another.

Crucially, the task is not paid by the foreign company exporting but by the getting business, which pays the levy to its government, supplying it with useful tax profits.

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

These might be worth as much as $250billion a year, or 0.8 per cent of US GDP, according to experts at Capital Economics.

Canada, Mexico and China together account for $1.3 trillion - or 42 percent - of the $3.1 trillion of goods imported into the US in 2023.

Most economic experts hate tariffs, mainly because they trigger inflation when companies hand down their increased import expenses to consumers, sending out rates higher.

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

In his current election campaign, Mr Trump made clear of his plan to impose import taxes on neighbouring countries 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 happen' - and perhaps the UK.

The US President states Britain is 'escape of line' but a deal 'can be exercised'.

Nobody must be amazed the US President has actually decided to shoot first and ask questions later.

Trade sensitive companies in Europe were also struck by Mr Trump's tariffs, including German carmakers Volkswagen and BMW

Shares in European durable goods business such as drinks huge Diageo, that makes Guinness, fell greatly amid worries of greater expenses for their items

What matters now is how other nations react.

Canada, Mexico and China have already struck back in kind, triggering worries of a tit-for-tat escalation that might swallow up the entire international 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 actually been ripped off by virtually every nation on the planet,' he added.

Mr Trump says the tariffs imposed by previous US President William McKinley in 1890 made America thriving, ushering in a 'golden era' when the US surpassed Britain as the world's greatest economy. He wishes to duplicate that formula to 'make America terrific again'.

But professionals say he risks a re-run of the Smoot-Hawley Tariff Act of 1930 - a disastrous procedure introduced simply after the Wall Street stock market crash. It raised tariffs on a broad swathe of goods imported into the US, causing a collapse in global trade and worsening the results of the Great Depression.

'The lessons from history are clear: protectionist policies seldom provide the designated benefits,' says Nigel Green, president of wealth manager deVere Group.

Rising expenses, inflationary pressures and interrupted global supply chains - which are even more inter-connected today than they were a century ago - will impact services and consumers alike, he included.

'The Smoot-Hawley tariffs intensified the Great Depression by suppressing international trade, and today's tariffs risk setting off the very same damaging cycle,' Mr Green includes.

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

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

The excellent news is that inflation didn't increase in the aftermath, which might 'mitigate present financial market fears that higher tariffs will suggest greater prices and higher rates will imply greater interest rates,' Mr Mould adds.

The factor prices didn't jump was 'because consumers and companies declined to pay them and looked for less expensive choices - which is exactly the Trump plan this time around', Mr Mould explains. 'American importers and foreign sellers into the US elected to take the hit on margin and did not pass on the cost impact of the tariffs.'

In other words, companies soaked up the higher costs from tariffs at the expenditure of their revenues and sparing customers rate increases.

So will it be different this time round?

'It is hard to see how an escalation of trade stress can do any good, to anyone, at least over the longer run,' says Inga Fechner, senior economic expert at investment bank ING. 'Economically speaking, escalating trade tensions are a lose-lose circumstance for all countries included.'

The effect of an international trade war might be ravaging if targeted economies strike back, costs increase, trade fades and development stalls or falls. In such a circumstance, rates of interest might either increase, to suppress higher inflation, or fall, to boost sagging growth.

The agreement amongst professionals is that tariffs will imply the expense of obtaining stays greater for longer to tame resurgent inflation, however the reality is nobody actually knows.

Tariffs might likewise cause a falling oil price - as demand from industry and customers for dearer products sags - though a barrel of crude was trading greater on Monday in the middle of fears that North American supplies may be interrupted, resulting in shortages.

Either method a remarkable drop in the oil price might not suffice to conserve the day.

'Unless oil costs come by 80 per cent to $15 a barrel it is unlikely lower energy costs will offset the results of tariffs and existing inflation,' states Adam Kobeissi, founder of an influential investor newsletter.

Investors are playing the 'Trump tariff trade' by changing out of dangerous properties and into traditional safe houses - a pattern specialists state is likely to continue while uncertainty continues.

Among the hardest hit are microchip and innovation stocks such as Nvidia, which fell 7 percent, 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 companies were likewise struck. Shares in German carmakers Volkswagen and BMW and durable goods companies such as drinks giant Diageo fell greatly in the middle of worries of higher expenses for their products.

But the greatest 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, users.atw.hu while Ethereum - another significant cryptocurrency - fell by more than a third in the 60 hours since news of the Trump trade wars struck the headlines.

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

As investors get away these highly unpredictable possessions they have actually stacked into traditionally safer bets such as gold, which is trading at a record high of $2,800 an ounce, and the dollar, which rose against significant currencies yesterday.

Experts state the dollar's strength is actually a benefit for links.gtanet.com.br the FTSE 100 because much of the British companies in the index make a lot of their money in the US currency, meaning they benefit when earnings are translated into sterling.

The FTSE 100 fell the other day but by less than a lot of the major indices.

It is not all doom and gloom.

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

Traders expect the Bank of England to cut rates today by a quarter of a portion point to 4.5 per cent, systemcheck-wiki.de while the opportunity of three or more rate cuts later this year have actually increased in the wake of the trade war shock.

Whenever stock markets wobble it is appealing to panic and offer, wiki.vst.hs-furtwangen.de however holding your nerve typically pays dividends, specialists state.

'History likewise shows that volatility types opportunity,' states deVere's Mr Green.

'Those who are reluctant risk being caught on the wrong side of market motions. But for those who gain from past disruptions and take decisive action, this duration of volatility could present some of the finest chances in years.'

Among the sectors Mr Green likes are European banks, because their shares are trading at fairly low costs and rate of interest in the eurozone are lower than somewhere else. 'Defence stocks, such as BAE Systems, are also appealing due to the fact that they will give a stable return,' he includes.

Investors need to not hurry to sell while the photo is cloudy and can keep an eye out for possible bargains. One strategy is to invest regular month-to-month amounts into shares or funds rather than big lump sums. That method you minimize the danger of bad timing and, when markets fall, you can purchase more shares for your cash so, as and when prices rise again, you benefit.