Aurelia Butler

One scoop to start: Activist hedge fund Elliott Management is increasing the pressure on oil refiner Phillips 66, kick-starting a proxy battle calling for “sweeping changes” at the US energy conglomerate.Another scoop to start: President Donald Trump has suggested he could cut tariffs on Chinese goods if Beijing allows ByteDance, the Chinese owner of TikTok, to divest the hugely popular video sharing app to avoid a ban in the US.Welcome to Due Diligence, your briefing on dealmaking, private equity and corporate finance. This article is an on-site version of the newsletter. Premium subscribers can sign up here to get the newsletter delivered every Tuesday to Friday. Standard subscribers can upgrade to Premium here, or explore all FT newsletters. Get in touch with us anytime: Due.Diligence@ft.comIn today’s newsletter: Wall Street’s big tariff painMarket turmoil derails Vista dealPlaid’s valuation takes a hitTrump’s tariffs rattle Wall StreetIn early 2025, Bill Ackman converted a stock position of over $1.4bn in footwear giant Nike into call options.The billionaire investor had proclaimed President Donald Trump’s return to the White House as the most “pro-business” and “pro-growth” administration in decades.But the Pershing Square founder nonetheless used the trade to take money off the table on a footwear brand that was exposed to Trump’s planned tariffs.US markets on Thursday plunged after the president unveiled the largest tariffs in about a century. Stocks fell the most since the early days of the coronavirus pandemic when the global economy was shuttered.Ackman had not hedged his $16bn portfolio ahead of Trump’s announcement unlike in the early stages of the pandemic. He is now among legions of Trump supporting Wall Street luminaries who have seen their portfolios pummeled due to the tariffs announcement.Thursday’s market sell-off was a long way from how attendees of the World Economic Forum’s conference at Davos anticipated this year would unfold.Scores of billionaire investors and corporate titans predicted at the Swiss winter resort that the world would soon be subsumed by American exceptionalism. But they were wrong. Trump’s promise to unleash economically destructive tariffs has done just that. The tariffs announcement, branded “liberation day” by the White House, has caused deep pain across Wall Street.Shares in some of the world’s biggest private capital groups were hammered. Apollo Global Management fell nearly 13 per cent while KKR plummeted more than 15 per cent. Blackstone’s stock fell nearly 10 per cent. The risks of inflation, a recession and freezing deal markets threaten to cause the private equity machine to stall anew after years of lacklustre activity and performance. Meanwhile, groups that had boomed during the private credit wave — like Ares Management and Blue Owl — also suffered as investors recalibrated growth expectations. Some dealmakers said rising loan defaults were on the horizon. The trading day was a painful reversal for the legions of financiers who had hyped up Trump’s second term in the White House as a business-friendly era that would turbocharge economic growth.Some now think the economic picture looks positively dire.Robert Koenigsberger, founder of emerging market-focused investment firm Gramercy Funds Management said the deluge of tariffs “increases the risk of a recession and materially increases the risk of stagflation”.Yet there are some investors out there who have de-risked enough that they’ve made some money — or at least haven’t lost a ton. One of them is the Oracle of Omaha.Warren Buffett’s Berkshire Hathaway barely traded down, slipping just over 1 per cent. He spent the past year dramatically cutting his exposure to equities such as Apple, and shifting into short-term Treasury bills. Apple shares fell more than 9 per cent on Thursday.A jumbo private credit refinancing gets spikedVista Equity Partners was able to celebrate earlier this year when it refinanced some high-cost private credit debt on a portfolio company.The leveraged buyout shop was hoping to catch lightning twice. But turbulence in financial markets as Trump ratcheted up his trade war has snarled Vista’s latest attempt.The private equity group has shelved plans to refinance or pay off nearly $6bn of debt and preferred equity of portfolio company Finastra, the highly leveraged financial data company it owns.The deal would have allowed Vista to refinance a $4.8bn private credit loan — which at the end of 2024 carried an 11.7 per cent interest rate — and recoup $1bn of its own money that it was forced to pump into Finastra in 2023 to obtain that private credit loan.Finastra’s private credit loan is one of the largest outstanding and Vista’s push to secure the debt in 2024 became a flashpoint in markets. Lenders were only willing to extend credit if Vista invested its own money into the business.Vista was forced to borrow against the value of one of its flagship funds to raise the cash, turning to a so-called net asset value loan. It was a novel financial manoeuvre and captivated the industry.That’s why when markets rallied earlier this year, Vista dialled up its bankers at Morgan Stanley to try to rework the deal. The bank was successful in raising $2.5bn in the loan markets to refinance private credit debt for another Vista-backed company, known as Avalara.But their efforts misfired for Finastra. Bankers initially pitched a $5.1bn senior loan with an interest rate just 3.75 percentage points above the floating rate benchmark, which would have yielded more than 8 per cent. They were willing to offer larger discounts and coupon payments on a $1bn junior loan, which Vista planned to use to redeem its preferred equity. As market volatility jumped, would-be buyers shied away and sources told DD’s Eric Platt and the FT’s Will Schmitt that the bank went pencils down. One banker who followed the Finastra deal said​ that after the balance of power favoured syndicated markets for the past half year​, “we’re going to see a pendulum swing back towards the private credit market​.”Plaid’s valuation halves on new funding roundRewind just a few years to 2021: interest rates were at rock bottom and in the era of easy money, investors threw cash at start-ups without a second thought.Fintech founders thrived in this environment, building flashy tech outfits in the previously staid business of banking. Valuation multiples soared, and money poured in. At its peak in 2021, fintechs received more than $121bn from venture capital funds. Last year, that figure was just $29.5bn. But the mood music has now changed. Investors have withdrawn their wallets as interest rates have risen and fintech valuations are taking a hiding.US-based Plaid is the latest victim of the high rate environment. The fintech, which helps consumers link their bank accounts to other websites and apps, announced on Thursday that it had its valuation slashed in half in its most recent funding round. Investors including BlackRock, Fidelity and Franklin Templeton put $575mn into the business, valuing Plaid at $6.1bn — less than half the $13bn it was worth when it last raised funds in 2021.Plaid’s chief executive Zach Perret was candid when speaking to the FT. He said the company’s last fundraising round coincided with “the peak of the market” and added that since then, “tech multiples have massively compressed”.Even still, some of the largest fintechs have increased their valuations recently. Revolut became Europe’s most valuable start-up last year with a $45bn valuation. It signals companies in the lossmaking open banking sector — which relies on data-sharing technology — haven’t picked up in the same way. Job movesKlaus Schwab, the founder of the World Economic Forum, will “start the process” of stepping down as chair of its board of trustees, weeks after the organisation promised an overhaul after an investigation into workplace discrimination.Goldman Sachs has named Heiko Weber and Trent Wilkins as co-heads of the bank’s real estate group in Emea. Weber previously focused on various real estate markets throughout Europe, while Wilkins was co-head of corporate investment grade origination in Emea.Morgan Stanley has hired Jon Swope and Mark Filenbaum as managing directors for the bank’s healthcare investment banking group, Bloomberg reports. Swope previously worked for Barclays, while Filenbaum previously worked at UBS.Kirkland & Ellis has hired Susan Burkhardt as a partner in the firm’s investment funds practice, where she’ll focus on credit funds. She previously worked for Clifford Chance. Smart readsBling, bags, booze US consumers are likely to be hit by the price rises across sectors from aviation to cars, the FT reports. Find out which goods will be hit first — and the hardest.Reverse course Meet the lawyer who helped Trump’s in-laws, the Kushners, crack down on poor tenants, and who now helps renters fight big landlords, ProPublica writes. Cost analysis Is college still worth it economically? Yes, Bloomberg writes — but who it benefits the most shifts constantly. News round-upApple loses more than $300bn in market value from Trump tariff hit (FT)Donald Trump’s sweeping tariffs ignite $2.5tn rout on Wall Street (FT)Fitch downgrades China’s sovereign debt over spending and tariffs (FT)Deloitte seeks to avoid liability over US nuclear fiasco (FT)Oil slides as Opec+ lifts output and tariffs spark global growth fears (FT)Due Diligence is written by Arash Massoudi, Ivan Levingston, Ortenca Aliaj, and Robert Smith in London, James Fontanella-Khan, Sujeet Indap, Eric Platt, Antoine Gara, Amelia Pollard and Maria Heeter in New York, Kaye Wiggins in Hong Kong, George Hammond and Tabby Kinder in San Francisco. Please send feedback to due.diligence@ft.comRecommended newsletters for youIndia Business Briefing — The Indian professional’s must-read on business and policy in the world’s fastest-growing large economy. Sign up hereUnhedged — Robert Armstrong dissects the most important market trends and discusses how Wall Street’s best minds respond to them. Sign up here More

How can investors parse Donald Trump’s policymaking? That is a burning question right now, as markets tumble after the US president announced tariffs on Wednesday that exceed even those of the protectionist 1930s.Viewed through the lens of mainstream 20th-century economic thinking — be it that of John Maynard Keynes or free-marketeers like Milton Friedman — such tariffs seem strangely self-sabotaging. Indeed, the so-called liberation day declared by Trump smacks of such economic lunacy that it might seem better explained by psychologists than economists. However, I would argue that there is one economist whose work is very relevant in this moment: Albert Hirschman, author of a striking book published in 1945, National Power and the Structure of Foreign Trade.In recent decades, this work has gone largely ignored, as Jeremy Adelman, a Princeton historian who wrote Hirschman’s biography, points out. No wonder. The German Jewish economist suffered such trauma in the Spanish civil war and Nazi Germany that when he arrived at the University of California, Berkeley, as an economist, he decided to study autarky.More specifically, he used the disastrous protectionism of the 1930s to develop a framework for measuring economic coercion and the exercise of hegemonic power (the academic word for bullying). However, this analysis was largely ignored by trade economists, since it ran counter to both Keynesian and neoliberal economic ideas. Instead, the book’s main impact was on antitrust analysis. The economist Orris Herfindahl later used Hirschman’s ideas to create an index measuring corporate concentration, which was adopted by the US Department of Justice, among others. However, if Hirschman had been alive to watch Trump unveil his tariff strategy in the White House Rose Garden this week, he would not have been surprised. Neoliberal thinkers often see politics as a derivative of economics. But Hirschman viewed this in reverse, arguing that “so long as a sovereign nation can interrupt trade with any country at its own will, the contest for more national power permeates trade relations”.And he viewed “commerce as . . . a model of imperialism which did not require ‘conquest’ to subordinate weaker trading partners”, as Adelman says. This is close to how the Trump advisers parse economics. But it is very different from how Adam Smith or David Ricardo saw trade flows (which they assumed involved comparably powerful players). Some economists are leaning into this shift. Just after Trump spoke, a trio of American economists — Christopher Clayton, Matteo Maggiori and Jesse Schreger —  released a paper outlining the growing field of “geoeconomics”, inspired by Hirschman.When the trio first started this research agenda, four long years ago, “hardly anyone seemed interested” in the ideas, since they were so at odds with the current frameworks, admits Maggiori. But interest is now surging, he says, predicting a looming intellectual shift comparable to that which took place after the global financial crisis. This year’s American Finance Association meeting, for instance, featured a novel session on geoeconomics, where Maurice Obstfeld, former chief economist of the IMF (and fan of Hirschman), delivered a forceful speech.This work has already produced three themes that investors should pay attention to. First, and most obviously, the trio’s analysis shows that it is dangerous for small countries to become too dependent on any large trading partner, and they offer tools to measure such vulnerability. Second, they argue that the source of America’s hegemonic power today is not manufacturing (since China controls key supply chains) but is instead financial and structured around the dollar-based system. Trump’s tariffs, therefore, are essentially an attempt to challenge another hegemon (China), but his policies around finance are an effort to defend existing dominance. (The hegemony in technological power, I would argue, is still contested.) This distinction matters for other countries trying to respond.Third, the trio argue that hegemonic power does not work in a symmetrical manner. If a bully has an 80 per cent market share, say, it usually has 100 per cent control; but if market share slips to 70 per cent, hegemonic power crumbles faster, since weaklings can see alternatives. This explains why the US has failed to control Russia via financial sanctions. And the pattern may play out more widely if other countries react to Trump’s aggressive tariffs by imagining and developing alternatives to the dollar-based financial system. Bullies seem impregnable — until they are not.Is this analysis depressing? Yes. But it shouldn’t be ignored. And if shocked investors and policymakers want to cheer themselves up, they might note something else: against all the odds, Hirschman was a life-long optimist — or “possibilist”, as he preferred to say. He thought that humans could learn from history to improve the future. Trump is ignoring that lesson now, with grim consequences. But nobody else should. gilllian.tett@ft.com More

Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldDistil grain anywhere on the island of Ireland and you can call it Irish whiskey. But under Donald Trump’s tariffs, the spirits made north of the border might get an advantage.The US president has imposed a 10 per cent tariff on UK exports but 20 per cent on the EU, suggesting that whiskey sold into America from Northern Ireland will face a lower duty than that from the Republic.However, as with many agrifood products, ingredients can be sourced on one side of the Irish border and processed on the other. This potentially complicates the tariff picture for an industry worth $1.1bn in revenue in the US if goods made with inputs from the Republic of Ireland are deemed to be of EU origin.“We’re not 100 per cent sure what’s happening,” said Peter Lavery, director of Titanic Distilleries, a Belfast-based newcomer to the industry which recently announced plans to expand sales in the US.Better-known Irish whiskey brands include Jameson in the Republic and Bushmills in Northern Ireland, but it is a growing industry with more than 40 distilleries now scattered across the island. The Irish whiskey Association says nearly 4.7mn, nine-litre cases of Irish whiskey were sold in the US in 2003. Whiskey produced fully in Northern Ireland, casked there and left for three years to mature is classified as a Northern Irish product, producers say. However, many of the younger whiskey businesses in Northern Ireland buy the young product from the Republic before ageing and bottling it north of the border. “Beyond the headline rates, we don’t know which [tariff] applies,” said one industry figure. Lavery says Titanic buys from both the North and the Republic.John Kelly, McConnell’s Irish Whiskey chief, said the industry was working with the IWA and Spirits Europe “to get clarity . . . as quickly as possible”.Exports from Northern Ireland are counted as UK exports but officials say whether or not EU content sourced in the Republic of Ireland would incur the EU tariff depends on how the US determines rules of origin.“We will always act in the best interests of all UK businesses. This of course includes those in Northern Ireland which is a part of the UK customs territory and internal market,” said a UK government spokesperson. The EU is evaluating how to respond but Trump has already said he will hit back with a 200 per cent tariff on European alcohol if Europe puts counter-tariffs on US whiskey. Adrian McLaughlin, who has developed two Northern Irish whiskey brands, Outwalker and Limavady, and is this month opening the island’s first “whiskey hotel” in a 19th-century property that belonged to Winston Churchill, said tariffs could drive US bourbon prices higher too.As tariffs push up the price of Irish whiskey, “What does Bourbon do? Does Bourbon sit and retain its competitive advantage? Or does it say hold on — there’s a margin opportunity here, we’ll put our pricing up,” he said.Eoin Ó Catháin, director of the Irish whiskey Association which covers producers across the island, said engagement with the Irish government and EU continued in the hope of returning “to the reciprocal, zero-for-zero tariff environment which brought us such success”.If the tariff differential between the UK and EU remained “it’s a huge advantage” but “we are obviously preparing for the worst,” Lavery said.Irish Distillers, which owns Jameson and other Irish brands, declined to comment. Bushmills, owned by Mexico’s Becle, did not immediately respond.Irish whiskey is one of the world’s fastest-growing categories of spirit. US consumption is expected to grow by 2 per cent in volume in 2023-28, according to IWSR, an alcohol data provider.“This is not the end of the world,” said McLaughlin. “We’ll work it out.” More

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Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldPresident Donald Trump has suggested he could cut tariffs on Chinese goods if Beijing allows ByteDance, the Chinese owner of TikTok, to divest the hugely popular video sharing app to avoid a ban in the US.“We have a situation with TikTok where China will probably say we’ll approve a deal, but will you do something on the tariffs,” Trump said aboard Air Force One. “The tariffs give us great power to negotiate.”The comments came one day after Trump imposed “reciprocal” tariffs on dozens of nations, including a 34 per cent levy on imports from China that followed the 20 per cent tariff he imposed earlier this year.Trump also said his administration was “very close” to reaching a deal with “multiple investors” that would allow TikTok to continue to operate in the US. Congress last year passed legislation requiring ByteDance to divest the app or face a nationwide ban. Trump extended the deadline for divestment until Saturday.Lawmakers passed the legislation to address security concerns about possible Chinese government influence over TikTok’s algorithm. Security officials are also concerned that ByteDance’s ownership of TikTok would enable Beijing to obtain the personal data of millions of Americans.Show video info“We’re very close to a deal with a very good group of people,” Trump said. Earlier on Thursday, vice-president JD Vance told Fox News the deal would “come out before the deadline”.The White House this week held talks to thrash out the contours of a deal that would be palatable to Republicans, as well as ByteDance and the Chinese government, which would need to give its blessing. The administration has been weighing a proposal to spin off TikTok from its Chinese parent. It would create a new US entity and include fresh American investment to dilute the ownership stakes of Chinese investors, according to multiple people familiar with the matter. Under the proposal, new outside investors, including Andreessen Horowitz, Blackstone, Silver Lake and other big private capital firms, would own about half of TikTok’s US business, the people said. Large existing investors in TikTok, including General Atlantic, Susquehanna, KKR and Coatue, would hold 30 per cent of the US entity, while ByteDance would keep a stake at just below 20 per cent. This would adhere to requirements in the US law that no more than a fifth of the company be controlled by a “foreign adversary”. Oracle, meanwhile, would provide data security to the company. But one big flashpoint is who would control TikTok’s highly sought-after algorithm. One option under discussion was that ByteDance would continue to develop and operate the algorithm — which has been a central demand of the Chinese government — while the new US group could access it through a licensing agreement, the people said. However, China hawks and legal academics have argued that the algorithm needs to be fully operated by the US entity to meet the requirements of the legislation. Several members of the Trump administration, including secretary of state Marco Rubio and national security adviser Mike Waltz, were vocal opponents of allowing China to retain control of the app when they served in Congress.The Chinese embassy in Washington did not respond to a request for comment. A ByteDance representative did not immediately respond to a request for comment. More

US stocks tumbled on Thursday while the dollar sank, as investors bet that Donald Trump’s sweeping tariffs would result in pain for the US economy.Some content could not load. Check your internet connection or browser settings.The S&P 500 was down 3.8 per cent. The Nasdaq Composite tumbled 4.9 per cent, dragged down by an 8.5 per cent fall for index heavyweight Apple. The dollar was down 1.7 per cent against a basket of rivals.Brent crude, the global oil benchmark, was down 6.8 per cent at $69.86 a barrel. WTI, the US benchmark, fell 7.1 per cent to $66.59 a barrel.“The collapse is a loss of confidence in dollar-denominated assets in general,” said Francesco Pesole, a currency strategist at ING. “It’s a vote of no confidence on 100 days of Trump.”Robert Tipp, PGIM’s head of global bonds, said markets were “very complacent” but now they are going into “spiral mode of trading toward a recession until they have probable cause to stop”. The moves came after Trump said a levy of 10 per cent would apply to nearly all US imports from April 5, and that dozens of countries, including China, would be subject to further “reciprocal” tariffs from April 9.European stocks were also hit on Thursday, with the continent-wide Stoxx Europe 600 index closing 2.6 per cent lower, led by a big sell-off in shares of export-focused companies.“THE OPERATION IS OVER! THE PATIENT LIVED, AND IS HEALING,” Trump wrote on Thursday on his Truth Social platform.“THE PROGNOSIS IS THAT THE PATIENT WILL BE FAR STRONGER, BIGGER, BETTER, AND MORE RESILIENT THAN EVER BEFORE,” he added. More

This article is an on-site version of our FirstFT newsletter. Subscribers can sign up to our Asia, Europe/Africa or Americas edition to get the newsletter delivered every weekday morning. Explore all of our newsletters hereGood morning and welcome back to FirstFT Asia. In today’s newsletter: Andreessen Horowitz could join US TikTok bidChina’s latest military exercises around TaiwanIndonesia’s new sovereign wealth fund vows transparencyUS venture capital giant Andreessen Horowitz is in talks to invest in social media platform TikTok as part of an effort led by Donald Trump to wrest control of the popular video app from its Chinese owners.What we know: The group, whose co-founder Marc Andreessen is a vocal supporter of the US president, is in talks to add new outside investment that will buy out TikTok’s Chinese investors. The talks come as part of a bid led by Oracle and other American investors to carve it out of its parent company ByteDance. Andreessen Horowitz was approached as TikTok’s advisers and the White House sought to add financial firepower to ongoing discussions. The firm was strongly considering making an investment, said three people familiar with the discussions. Looming deadline: The Oracle-led bid recently emerged as the frontrunner ahead of a deadline on April 5, when a federal law would ban the app in the US unless its Beijing-based owner sells the American arm to non-Chinese entities, according to multiple people familiar with the matter. Trump connections: Marc Andreessen’s close ties to the Trump administration include helping recruit staff for Elon Musk’s US government cost-cutting unit, while former Andreessen Horowitz general partner Sriram Krishnan is serving as a White House adviser for artificial intelligence. Here’s the full story — plus more tech news below:And here’s what else we’re keeping tabs on today:Trump’s “liberation day” tariffs: The US president could trigger a $1.4tn trade war today when he plans to announce sweeping new tariffs on imported goods. Here’s how the worse-case scenario could unfold.Economic data: March inflation figures are due from Singapore, South Korea and Australia. Benjamin Netanyahu: The Israeli prime minister will visit Hungary, defying an arrest warrant from the International Criminal Court over alleged war crimes in Gaza.Five more top stories1. China has begun large-scale military and coastguard exercises around Taiwan, the latest round in Beijing’s escalating campaign to assert its claims of sovereignty over the island nation. Two people briefed on the situation said the Shandong, a Chinese aircraft carrier, was approaching waters 24 nautical miles off Taiwan’s coast yesterday, the closest it has ever been to the Taiwanese mainland. Here’s how Taipei responded.2. Indonesia will run its colossal new sovereign wealth fund “like a public company”, its chief investment officer said as he acknowledged investor concerns about the governance of a vehicle with $900bn in assets. Danantara, which became one of the world’s largest sovereign wealth funds overnight when it launched last month, is set to invest billions of dollars into priority sectors identified by President Prabowo Subianto.3. The US labour watchdog froze two cases against Apple days after Trump nominated an attorney who represents the tech group to be the agency’s top legal official. The National Labor Relations Board filed multiple complaints against the iPhone maker last year alleging it intervened against employee attempts to organise, but abruptly pulled back from two of the cases late last week, according to documents seen by the FT.4. The EU has a “strong plan to retaliate” against US tariffs expected today, the president of the European Commission has said. Ursula von der Leyen told the European parliament yesterday that the bloc was prepared to hit services exports including those from Big Tech companies if Trump imposed “reciprocal tariffs” on all imports into the US.5. Vehicle sales at China’s BYD soared 58 per cent in the first quarter in a stark contrast to an expected fall in demand for Tesla’s electric cars, as European consumers shun Elon Musk’s brand. Analysts warned figures set to be released today for Tesla’s first-quarter sales were likely to show a drop of more than 10 per cent. News in-depth© Alex Wheeler/FT montage/Getty ImagesKlarna has brought “pay in four” loans to everything from food to fashion. Now it has a $15bn New York IPO in its sights. Can the Swedish fintech finally silence the “buy now, pay later” doubters?We’re also reading . . . Chart of the dayInvestors are pouring cash into gold funds at the fastest pace since the Covid-19 pandemic, amid mounting concerns over the economic impact of Trump’s trade war.Take a break from the news . . . HTSI goes inside the Aman Nai Lert Bangkok, a new hotel in the heart of the Thai capital that pays homage to the man who shaped the modern city.The swimming pool at Aman Nai Lert Bangkok, Thailand More

Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldInvestors are pouring cash into gold funds at the fastest pace since the Covid-19 pandemic, amid mounting concerns over the economic impact of US President Donald Trump’s tariff war.Gold reached a record $3,148.88 a troy ounce on Tuesday, as part of a broader flight to haven assets such as US Treasuries and cash. It later fell back to $3,114, up more than 17 per cent this year — including its strongest quarterly performance since 1986. Investors are bracing themselves for Trump’s expansive new tariffs, which are due to be announced on Wednesday, a day he has dubbed “liberation day”. Many economists fear the move will hit global growth, triggering a search for safe assets. “Uncertainty is one of the main factors that has led to a renewed interest in gold,” said Krishan Gopaul, senior analyst at the World Gold Council, an industry body. “There is a general risk-off sentiment in the market at the moment.”Amid mounting fears of a global trade war, investors have poured more than $19.2bn into gold-backed exchange traded funds during the first quarter of this year — the biggest inflows in dollar terms since the pandemic, according to calculations from Standard Chartered.The amount of cash in investors’ portfolios — viewed as a gauge of caution — jumped by the largest monthly amount in five years, according to a recent fund manager survey carried out by Bank of America.US Treasuries have also made gains in the run-up to the tariff announcement, as investors seek to protect themselves against further volatility and hedge against risks to the American economy. Ten-year Treasury yields, which move inversely to prices, fell as low as 4.13 per cent on Tuesday — not far above their lowest level of the year. Yields on German Bunds, viewed as the haven Eurozone asset, were sent sharply higher last month as the country planned a huge spending drive, but fell back below 2.7 per cent this week for the first time since early March. “With a homegrown US slowdown potentially unfolding behind the tariff headlines, government bonds look [like] attractive risk-reducers at this point,” said Sunil Krishnan, head of multi-asset at Aviva Investors. “Gold is hard to add to, given the force of the move.”Central bank buying has been the main driver of gold purchases in recent years, but the recent surge in gold ETF inflows highlights how fears over the economy and stock markets have drawn in a broader range of investors as part of a hunt for haven assets.“The resurgence in ETFs has been the most notable shift in gold dynamics in recent weeks,” said Suki Cooper, precious metals analyst at Standard Chartered. Expectations of lower yields on other assets, combined with concerns that tariffs could hit inflation and growth, have helped fuel the recent flows, she said.Bullion’s sharp rally in recent months has prompted several banks to increase their gold price forecasts, including Macquarie, which now expects it to touch $3,500 this year. Tariff concerns have also driven a huge surge in physical gold bars being flown into New York, where stockpiles on Comex have reached record levels, although that flow has recently started to slow down.On Wall Street, defensive stocks seen as less exposed to economic growth have prospered. Healthcare stocks such as UnitedHealth and HCA Healthcare are up more than 10 per cent over the past month, while the broader S&P 500 index is down by about 5 per cent.“Very few assets are showing up as attractive on our screens at the moment,” said Pete Drewienkiewicz, chief investment officer for global assets at consultancy Redington. “So I don’t think it is surprising to see people moving a bit more defensive after such a good strong run [for markets].” More