Log in

Forgot your password?

Access code

Log in

Forgot your password?

Log in

Dealing with Donald Trump's new trade war

Fund Focus  —  12/02/2025

Yoann Ignatiew

General Partner, Global Equities Portfolio Manager

Charles-Edouard Bilbault

Global Equities Portfolio Manager

Read more R-co Valor

For the next four years, the 47th President of the United States' propensity for permanent power struggles will fuel the uncertainties surrounding global economic dynamics. With its international allocation, R-co Valor is necessarily exposed to these upheavals. How should we approach this new environment and deal with the new trade war declared by Donald Trump?

Following President Donald Trump's announcement of new 25% tariffs on imports from Canada and Mexico, a one-month moratorium was immediately introduced to allow room for negotiations. Meanwhile, discussions between Washington and Beijing failed to reach an agreement, to the imposition of a 10% tariff on Chinese imports. In response, China swiftly retaliated with a series of countermeasures, further escalating trade tensions.

Among the key decisions, Beijing imposed additional tariffs ranging from 10% to 15% on on select U.S. goods and tighter controls on tungsten-based product exports, a strategic resource. Moreover, several American companies were added to the list of unreliable entities, restricting their business operations in China. In a fresh retaliatory move, Beijing also launched an antitrust investigation into Google, increasing pressure on the U.S. tech sector. More broadly, in 2024, imports from Mexico, Canada, and China collectively accounted for approximately 42% of total U.S. imports1. We believe that at case-by-case adjustments are likely, as it had been the case during Trump’s first term.

Although the newly elected President’s long-anticipated tariff increases were not a surprise, R-co Valor’s portfolio remains partially exposed to potential further hikes. This exposure primarily affects our investments in the railway sector and certain industrial stocks. Regarding our positions in China, it is important to highlight that most of our investments focus on companies catering to local consumption, with limited reliance on exports. Finally, the appreciation of the U.S. dollar against other currencies is working in our favour, as our (unhedged) exposure to the currency represents approximately 36%2 of the portfolio.

More than ever, our investment approach is rooted in identifying long-term trends rather than reacting to headlines. Over the past several months, we have repositioned the fund towards a more defensive profile to mitigate the impact of market fluctuations. However, we remain both vigilant and opportunistic, ready to seize opportunities when market corrections excessively penalize stocks whose business model resilience we fully appreciate. Furthermore, we hold over 30%2 in cash and equivalents. This allocation allows us to limit our equity market exposure while benefiting from an attractive yield, providing us with significant agility to re-deploy should market conditions shift.

[1] Bloomberg, 31/01/2025
[2] Rothschild & Co Asset Management, 31/01/2025



R-co Valor SRI 4/7
The synthetic risk indicator shows the level of risk of this product compared with others. It indicates the probability that this product will incur losses in the event of market movements or our inability to pay you. The risk indicator assumes that you hold the product for 5 years. The real risk may be very different if you opt to exit before maturity, and you may get less in return. We have classified this product in risk class 4 out of 7, which is a medium risk class and mainly reflects a discretionary management policy on equity markets and fixed-income products. In other words, the potential losses linked to the product's future results are at an average level, and if market conditions were to deteriorate, our ability to pay you could be affected. As this product does not provide protection against market fluctuations or a capital guarantee, you could lose all or part of your investment. The geographical and sector allocations and distributions are not fixed and may change over time, within the limits of the SICAV's prospectus. The figures cited relate to past months. Past performance is not a reliable indicator of future performance and is not consistent over time. Performance is calculated in euros and net of reinvested dividends. The information contained in this document does not constitute investment advice, tax advice, a recommendation, or investment advice from Rothschild & Co Asset Management.