When geopolitics supersede fundamentals, cross-border investors often default to caution. For much of the first half of 2025, many who expected to be active found themselves on the sidelines — not due to deteriorating fundamentals, but because of escalating and unquantifiable geopolitical and policy risks.

US President Donald Trump’s sweeping tariff regime, introduced earlier and more aggressively than anticipated, delivered a macro-political shock that halted transactions, disrupted capital flows and reignited doubts over trade alliances. It coincided with rising inflation, budget deficits and renewed geopolitical brinkmanship, all compounding investor anxiety. The decision to pause or delay was pragmatic: to hedge against deploying capital into policy uncertainty or selling into illiquidity.

The 90-day US–China tariff truce in April offered temporary relief, but deeper dislocations remain. Volatility returned in late May as President Trump threatened new tariff