Bridgewater examines how modern mercantilism reshapes financial markets

A meaningful shift toward multilateral trade frameworks or a documented rollback of protectionist measures would likely ease supply-chain fragmentation premiums and reduce currency volatility, though structural shifts in trade policy typically persist across administrations.

Continuation of existing tariff regimes and trade barriers without escalation would plausibly sustain the current bifurcation of equities (domestic-focused vs. export-exposed), keep commodity prices elevated via supply-chain inefficiency, and maintain elevated term premiums in fixed income as fiscal responses to trade friction persist.

A material widening of trade barriers, retaliatory tariffs, or currency intervention would put pressure on multinational earnings, disrupt commodity supply chains, and likely trigger a repricing of cross-border capital flows and currency carry trades.