In April, financial markets were whiplashed by a flurry of headlines on the trade front. While “Liberation Day” was met with sweeping tariff announcements, the trade war between the United States and China escalated with tit-for-tat levies. However, markets stabilized after the US administration softened their stance on trade. President Trump announced a 90-day pause on reciprocal tariffs – while officials expressed optimism that tensions with China may subside. Still, the unpredictable and damaging trade policies undermined the theme of US exceptionalism and eroded confidence in US assets last month.