Investors are being urged to prepare for significant market volatility as President-elect Donald Trump moves to implement sweeping tariffs and launch a new initiative aimed at cutting government spending. Nigel Green, CEO of deVere Group, a global financial advisory firm, has warned that these dual actions—an aggressive tariff agenda and the creation of the Department of Government Efficiency (DOGE)—are likely to disrupt markets in profound ways.
Trump has committed to introducing additional tariffs of 10% on Chinese goods and 25% on imports from Canada and Mexico. These protectionist policies, intended to tackle issues like illegal immigration and drug trafficking, represent a clear escalation of Trump’s campaign rhetoric. With global trade dynamics already shifting, these tariffs could lead to retaliatory measures from key trading partners, adding further uncertainty to international markets.
At the same time, the establishment of DOGE—which will focus on identifying and eliminating up to $500 billion in “unauthorized or misallocated” federal expenditures—will have far-reaching implications for industries reliant on government contracts. Green warns that sectors such as defense, pharmaceuticals, and information technology, which have historically depended on robust government spending, are particularly vulnerable to the looming cuts.
The combined effects of tariffs and government spending reductions create a “perfect storm” for investors, according to Green, urging them to reassess their portfolios in light of potential volatility. Industries tied closely to international trade, such as automotive, technology, and agriculture, are expected to face the brunt of the disruption. As trade barriers increase, companies will likely see costs rise, which could contribute to inflationary pressures and prompt tighter monetary policies.
China, frequently the target of Trump’s trade policies, will face an additional 10% tariff on exports to the U.S. Although Trump has suggested tariffs could escalate as high as 60%, creating uncertainty in the markets, the immediate impact will likely be felt most strongly by companies that depend on global supply chains.
While tariffs are capturing most of the attention, the DOGE initiative’s deep spending cuts could quietly reshape the landscape for sectors that rely heavily on government support. Green highlights that defense contractors, pharmaceutical companies, and clean energy sectors, all of which benefit from federal funding, may soon face significant budget cuts. These changes will leave such companies exposed to sharp revenue declines.
In light of these challenges, Green emphasizes the importance of diversification as a key strategy for investors seeking to mitigate risks. “Concentrated exposure to government-linked industries or trade-sensitive sectors could prove costly in the months ahead,” he warns. Investors are encouraged to diversify their holdings to ensure resilience against potential market shocks. Green also suggests that increasing exposure to less government-dependent sectors, such as technology and global consumer goods, may help shield portfolios from the worst of the disruptions.
Currency markets, too, are expected to experience turbulence, with the possibility that tariffs and fiscal tightening could briefly strengthen the U.S. dollar. However, prolonged trade disputes could ultimately weaken the dollar, creating potential opportunities for investors to adjust their strategies accordingly.
Despite the uncertainty, Green sees opportunities emerging for investors who act decisively. “Periods of volatility often provide fertile ground for strategic investments,” he says. “The key is preparation and agility.” Those who take proactive steps to adjust their portfolios now, Green concludes, will be better positioned to navigate the evolving economic landscape.
This moment, according to Green, is not one for complacency. With both Trump’s tariffs and DOGE’s fiscal overhaul threatening to reshape the market, investors must remain vigilant and responsive to the changing environment.
