Investors are exploring ways to mitigate the economic impact of tariffs by seeking out assets that can withstand a potential recession and higher inflation, or investing in companies that have lower reliance on international trade.

Following the imposition of Trump's tariffs, the S&P 500 has experienced a 7.7% decline since reaching its peak in February, leading investors to anticipate more market volatility. Uncertainty surrounding the extent of future tariffs has prompted investors to search for protective measures and investments that offer a safety net.

Investment strategies to counteract the effects of tariffs include commodities, precious metals like gold, value and defensive stocks, small-cap companies, and bonds. Some market analysts emphasize the need to look beyond the initial flight to safety caused by tariff risks and consider potential changes due to de-globalization from tariffs.

Investors like Don Calcagni suggest remaining cautious and diversifying investments to navigate the unpredictable tariff landscape. Market participants are also considering small-cap firms that may benefit from protectionist policies and have begun adjusting their portfolios to align with this strategic shift.

Robert Christian of Franklin Templeton highlights the value of global macro strategies or neutral equity funds for navigating market uncertainties and hedge against potential downside risks. Despite present challenges, the resilient response of the Trump administration to market disruptions may continue to keep investors on edge.