The Tariff Time Bomb: Why One Strategist Is Shorting Everything

In an increasingly complex global economic landscape, veteran strategist David Woo is sounding a stark warning, taking a bearish stance on both bonds and stocks. His rationale? The full, devastating impact of current and impending tariffs has yet to ripple through the global economy, and markets, in his view, remain dangerously complacent.

Woo's provocative position suggests that investors are underestimating the profound, lagged effects of trade barriers.

Tariffs, often seen as a political tool for domestic protection, are, according to Woo, a significant economic headwind poised to disrupt supply chains, inflate costs, and ultimately stifle global demand. This isn't just about specific industries; it's a systemic shock that could reverberate across all asset classes.

When it comes to bonds, Woo's decision to short them might seem counterintuitive to some, as economic uncertainty sometimes drives a flight to safety.

However, his perspective likely hinges on the inflationary pressures tariffs introduce. By raising the cost of imported goods and components, tariffs can fuel domestic price increases. This environment could force central banks to maintain a hawkish stance or even consider rate hikes, diminishing the appeal and value of existing bonds, leading to a decline in their prices.

The outlook for equities, in Woo's analysis, is equally bleak.

Tariffs act as a double-edged sword for corporations: they increase the cost of raw materials and intermediate goods, thereby squeezing profit margins, while simultaneously making exported finished goods more expensive and less competitive in global markets. This translates directly to reduced corporate earnings, dampened consumer spending power due to higher prices, and an overall environment of heightened uncertainty that erodes investor confidence.

Companies, especially those with extensive international supply chains or significant export exposure, are particularly vulnerable.

Woo's crucial point is timing. He believes the market has not yet fully priced in these long-term consequences. The initial shock waves may have passed, but the deeper, more insidious effects of disrupted trade flows, re-shored production (often at higher costs), and retaliatory measures are still accumulating below the surface.

He anticipates a delayed but inevitable reckoning, urging investors to prepare for a period where traditional market drivers are overshadowed by the pervasive drag of trade protectionism.

His strategy serves as a potent reminder that in a globalized world, seemingly isolated policy decisions can have far-reaching and interconnected economic consequences, creating both risks and opportunities for those who can accurately forecast their trajectory.