‘Market Meltdown Post Trump Tariffs Shall Pass; No Need To Panic’
Anand Mirani, a Bengaluru-based businessman and investor-trader, breaks down the real reasons behind the market crash post-Trump tariffs with valueable advice for investors
The markets are bleeding. Portfolios are deep in the red. And yet, I haven’t panic-sold a single stock. Am I worried? Of course. But I’m not surprised. Markets thrive on clarity. Right now, we’re knee-deep in uncertainty—and that’s the real culprit behind this crash.
It all started with the Trump administration’s aggressive tariff announcements. No warning, no detailed negotiations—just loud declarations that unsettled investors across the globe. It’s not just about what was said, but how it was said. When a sitting president treats every trading partner—friend or foe—with the same heavy-handed approach, it sends a message: the US, as the world’s largest consumption market (contributing nearly 30% to global GDP), is calling the shots.
Now, you might ask: Aren’t the intentions behind these tariffs good for America?
On paper, they are. President Trump wants to rein in the nearly $2 trillion fiscal deficit, bring manufacturing back home, and reduce government expenditure. All noble goals. An American would agree with the vision.
But what about the execution? Because if the method creates panic, then even the best intentions can trigger chaos. So why are the markets reacting this way if the overall objectives seem positive?
The answer lies in the ripple effect of tariff hikes. When import duties rise, the cost of goods in the U.S. goes up. That burden ultimately falls on the consumer, leading to a drop in consumption. As spending slows, businesses start pulling back on new investments. Capital expenditure projects get shelved, and companies wait to see how trade talks unfold with different nations. And that wait-and-watch mindset fuels even more anxiety in the market.
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To make things worse, businesses are unsure of the exact cost implications across sectors. Import costs are complex, and without clarity, cash flow projections become hazy. Add the looming threat of inflation and potentially higher government borrowing costs, and you have a recipe for rising equity risk premiums.
In financial terms:
Discounted Cash Flow = Future Cash Flows / (Risk-Free Rate + Equity Risk Premium)
If the numerator (expected future cash) is uncertain and the denominator (cost of capital) is climbing, the result is a lower present valuation of companies. That’s why we’re seeing a market selloff—the fundamentals aren’t matching the prices anymore.
Most investors are feeling the burn. Still, I’ve held my ground. Because long-term investing isn’t about avoiding losses—it’s about weathering storms.
So, what’s the way out for common investors like us?
The first step is capital preservation. In uncertain times, I shift allocations toward safer assets—gold, large-cap stocks, and sectors with more predictable cash flows. I avoid small and mid-caps with unclear growth visibility. I don’t panic-sell, and I certainly don’t make impulsive buys.
Most importantly, I stay patient. I wait for clarity on how the tariff situation unfolds, sector by sector, economy by economy. And for those who can afford it, hedging the portfolio—even if it comes at a cost—can be a useful insurance policy.
This isn’t the first market storm we’ve faced, and it won’t be the last. But if we understand the mechanics of what’s happening, and act with a cool head, we’ll come out of this stronger.
As told to Mamta Sharma
