Geopolitical tensions between the United States and China have had various negative impacts on global economic stability. One of the most significant forms of conflict is the tariff war, which directly affects supply chains, the price of goods, and the stability of financial markets.
For businesses and investors, it is important to know how to protect assets from this prolonged war. Protecting assets from a tariff war is not an easy task, especially when the economic policies of these two countries continue to change dynamically.
However, with the right approach and a well-thought-out strategy, you can still keep the value of your wealth stable even in the midst of global economic turmoil. Let’s take a look at effective strategies that you can apply to protect your assets from the tariff war between America and China below.
1. Portfolio Diversification Can Protect Assets from War
The first and most basic strategy in protecting assets from tariff wars is investment portfolio diversification. Diversification is a method of placing funds in various types of instruments such as stocks, bonds, gold, property, and mutual funds to reduce the risk of loss due to fluctuations in one sector alone.
Tariff wars often hit certain industries specifically, so spreading investment risk is very important. Diversification also includes geographical aspects. You can consider investing in other markets that are less affected by the trade conflict between the US and China.
Diversification can also be done by keeping some assets in stable foreign currencies that can help you maintain purchasing power and investment value. Through proper diversification, you have more opportunities to remain profitable despite global uncertainty.
2. Investing in Safe Haven Assets Like Gold
A safe haven asset is a type of asset that tends to stabilize or even increase in value during an economic or geopolitical crisis. Gold is often considered a safe haven and has been proven to overcome various economic crises. In the context of protecting assets from tariff wars, investing in gold assets is very relevant.
As tensions between America and China escalate, global investors tend to withdraw funds from risky assets and shift them to safe havens. You can follow this flow to secure your portfolio from losses.
Besides physical gold, you can also consider investing in digital gold. Digital gold offers the benefits that physical gold has with various additional conveniences. Through digital gold, you can make gold transactions anywhere and anytime without the need to queue or come directly to the gold shop.
You can also monitor gold prices that are always updated every minute in real-time to get the best buying and selling prices such as those in the Treasury application. The Treasury application is the first digital physical gold investment application to obtain a BAPPEBTI license so that its security is guaranteed.
Also Read: Gold Prices Rise as US vs. China Tariff War Heats Up, How Come?
3. Protecting Assets from War Can Be Done by Building Up Liquid Emergency Fund Reserves
In a volatile economy, building up liquid emergency fund reserves is essential. Liquidity is the ability of an asset to be converted into cash quickly without significantly reducing its value.
A liquid emergency fund can be cash, short-term deposits, or digital gold. Having a liquid asset allows you to survive difficult times without having to sell the asset at a low price. This is an important aspect of protecting assets from tariff wars.
A liquid emergency fund will give you the flexibility to make investment decisions without time pressure. This is especially crucial when the market is volatile due to the tariff war. Maintaining and increasing an easily accessible emergency fund is one of the key pillars in a long-term financial strategy.
4. Reassess Supply Chains and Sources of Income
For businesses, tariff wars can affect production costs and the availability of raw materials. Therefore, the fourth strategy in protecting assets from war is to re-evaluate supply chains and sources of income. You can look for alternative suppliers from countries that are not affected by high tariffs.
Another strategy is to build cooperation with local partners to reduce dependence on imports from hostile countries. Supplier diversification can increase the resilience of your business.
You also need to expand your sources of income by targeting new markets or expanding your product line. Businesses that are not dependent on one market will be more resilient to global economic shocks. Not only for big businesses, buddies who are just starting a business can also apply this strategy.
5. Utilize Hedging Instruments
Hedging is a financial strategy used to reduce the risk of price fluctuations in the event of a tariff war by protecting the value of an asset. If you have a large risk to foreign exchange or certain commodities, then hedging can be an effective shield against market volatility.
Many large companies have long used hedging to maintain the stability of their earnings and cash flow. There is nothing wrong with you, as an individual investor, also starting to learn and implement this strategy. One popular hedging instrument is gold.
The tariff war between the US and China could last for a long time, bringing uncertainty to investors and businesses. In such a situation, it is important not to be reactive, but to develop a well-thought-out and long-term strategy.
To that end, protecting assets from war is not just about surviving, but also about finding opportunities in the midst of a crisis. One of them is by starting or increasing digital gold investment. Digital gold is perfect for implementing the five strategies to protect assets during a tariff war.
The strategies above help you minimize risk while opening up the possibility of sustainable asset growth. Don’t wait until things get worse! Now is the right time to start protecting assets from tariff wars, and make your portfolio more resilient in the face of global turmoil through digital gold!
