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There is a growing call for a decrease in the US exceptionalism trade. Despite this, the US could potentially outperform other markets if tariffs lead to a global economic downturn. Ed Yardeni stated that they are maintaining a bias towards staying home rather than going global.

As President Donald Trump prepares to announce reciprocal tariffs, concerns about economic growth are at the forefront for economists and investors. There have been predictions that America's long-standing dominance in global markets may come to an end. However, in the event of a recession, the US could become a safe haven for investors.

If global economies suffer due to tariff-induced recession, the US may reclaim its status as a leading international market. Ed Yardeni highlighted various reasons why US markets could excel during a broader economic slowdown.

As uncertainty looms before the tariff announcement, the potential impact of the new levies on Wall Street sentiment is significant. The global trade worth $33 trillion is at stake, posing a direct threat to US and foreign GDPs.

Amid concerns about stagflation in the US, there is a 45% chance of such a scenario occurring this year according to Yardeni. Despite this, the US economy has certain advantages, such as full employment, being a net energy exporter, and a dynamic services-driven economy. Moreover, the US debt situation, while concerning, is not as critical as China's.

A tariff-induced recession in the US would negatively affect foreign exporters, particularly those already facing challenges like Germany and the UK. The Federal Reserve has more flexibility to cut interest rates compared to foreign central banks, which aims to stimulate economic growth.

Yardeni's perspective differs from those who believe that US stocks are underperforming compared to international counterparts. The concept of US market exceptionalism has faced skepticism this year, with investors questioning S&P 500 valuations and the dominance of US mega-cap tech companies.