Amid Global Trade Realignment and Market Noise, Disciplined Investors Focused on Fundamentals Will Find Opportunity — Not Just Disruption

The Trump administration’s newly enacted reciprocal tariffs have reignited one of modern memory’s most consequential economic debates. On the one hand, markets are rattled, financial experts are divided, and CEOs like Jamie Dimon are warning of a global economic slowdown. On the other, supporters argue that the U.S. is taking a bold and calculated stand after decades of tolerating unequal trade terms and strategic disadvantage.

Opposition to Tariffs:

Critics of the reciprocal tariffs raise concerns about their immediate and long-term effects on the economy. They point to significant market disruption, heightened investor anxiety, and the risk of retaliatory measures from trading partners that could harm key U.S. export sectors. Many economists warn that tariffs function as a consumption tax, potentially raising consumer prices and fueling inflation. Others argue that the unilateral rollout may strain global alliances and undermine the U.S.’s credibility in international negotiations. Additionally, experts have questioned the methodology used to determine tariff rates, suggesting it may be economically flawed or inconsistently applied. The sudden implementation and partial reversal have also introduced uncertainty, causing businesses to delay investment decisions and reconsider supply chain strategies.

Support for Tariffs:

Supporters of the reciprocal tariffs view them as a bold and calculated effort to reset long-standing trade imbalances and protect domestic industries. They argue that the U.S. has allowed foreign competitors broad access to its markets for decades while facing high tariffs and non-tariff barriers abroad. From this perspective, the all-at-once rollout is strategic – intended to create urgency and bring trading partners to the negotiating table. Proponents contend that the tariffs are already working, citing over 70 countries engaging in talks to reduce trade barriers and negotiate more equitable terms. They see tariffs not as isolationist but as a practical tool to enforce fairness and reciprocity, believing that short-term market disruptions are a necessary price for long-term economic sovereignty and stronger domestic production.

Meanwhile, despite market turbulence, many households have yet to feel direct effects. Inflation remains in check; consumer confidence is holding and talks with key trading partners from India to the EU are underway.

Where We Stand:

Naturally, these attention-grabbing influences churning around the capital markets and the real estate industry are causing uncertainty among commercial real estate owners, investors, and lenders.  How significantly will these dynamics affect specific real estate sectors in the immediate and the long term?  How best to react?

The presence of “black swans” with the potential to significantly and adversely affect commercial real estate are ever-present – from natural disasters to world political unrest, etc.  This makes exercising discipline and focus with prudent and calculated judgement critical in times such as this, and always.  Strategies based on thorough consideration of age-old real estate fundaments – timing relative to asset class, location, net operating income, cap rates, cash-on-cash returns, internal rates of return, debt service structure, and exit strategy are vital.

Simply put, with these things front of mind, be your best you and stay the course.  We believe this is a necessary correction to a decades-long imbalance, and the boldness of the approach may be exactly what’s needed to reset the table.

We’re watching this issue closely, not just as a matter of economic policy but as a turning point in America’s global economic posture.

May 12, 2025 | by John Zemet, CIO & COO and MJ Parker, Director of Research & Marketing at APG Companies

For additional CRE market updates and insights from APG, visit the Market News and APG Newsroom pages at www.apgcre.com.