The writer is co-founder and co-chair of Oaktree Capital Management and author of ‘Mastering the Market Cycle: Getting the Odds on Your Side’
The events last week surrounding US President Donald Trump’s tariffs announcement were reminiscent of those of 2008 and the global financial crisis they produced. All norms have been overthrown. The way world trade has operated for the past 80 years may be of little relevance to the future. The impact on economies and the world at large is entirely unpredictable. There have been no large-scale trade wars in the modern era, which means that accepted economic theories are largely untested.
We have to accept that there’s no such thing as foreknowledge here. This means that if we insist on achieving certainty or even confidence before acting, we’ll be frozen into inaction. Or if we conclude we’ve reached decisions with certainty or confidence, we’ll probably be mistaken. We must make our decisions in the absence of those things.