The Trump Administration has brought a renewed focus on trade policy, particularly around tariffs on imports from key trading partners like China, Mexico, and Canada. While tariffs have historically served multiple strategic purposes, including facilitating trade negotiations, strengthening domestic industries, shaping fiscal policy, and influencing supply chain decisions, the ultimate impact hinges on a complex combination of economic policy and corporate action. With a wide range of possible outcomes, it’s prudent for businesses to prepare for challenges, anticipate opportunities and expect a balance of each. Even under a potential downside case, we believe private equity, and particularly the U.S. middle market, is relatively insulated.
