Insights 
VT 
Trump has issued a warning on Truth Social regarding the potential imposition of new tariffs. These tariffs would target countries that have implemented measures he deems discriminatory.
Such measures include digital taxes and regulations affecting U.S. technology companies. In addition to tariffs, he also mentioned possible export restrictions concerning semiconductors.
Market Volatility Concerns
The renewed threat of tariffs brings back memories of the market volatility we saw during the 2018-2019 trade disputes, when the VIX saw multiple spikes above 20. We see this as a signal to purchase protection against a broader market downturn. Buying call options on the VIX or put options on the SPY and QQQ indices are prudent moves in the immediate term.
We should specifically focus on the technology sector, as it is at the heart of the digital tax issue. Companies like Alphabet and Meta derive over 50% of their revenue from international markets, making them exceptionally vulnerable if this rhetoric escalates into action. We are looking to buy puts on the XLK technology ETF to hedge against weakness in these mega-cap names.
The mention of semiconductor export restrictions is a major red flag for what has been a hot sector for the past year. The Philadelphia Semiconductor Index (SOXX) has rallied over 25% since early 2025, and this news could easily trigger a sharp correction. We believe establishing bearish positions on key names like NVIDIA or the SOXX ETF itself is a logical step to prepare for supply chain disruptions.
Impact on Global Markets
This isn’t just a U.S. market issue, as retaliatory tariffs would likely target key European and Canadian exports. The Eurozone economy, which relies heavily on exports, has shown signs of slowing, with industrial production figures from Germany declining in the second quarter of 2025. We are therefore considering positions that would benefit from a weaker euro, such as shorting EUR/USD futures.
