“Sell America” jitters resurface as tariff roulette drives cross-market swings

WASHINGTON — From trade threats to regulatory rollbacks, the past several days offered a familiar lesson for investors, allies and businesses: systems built for steady rules struggle when policy swings become a feature, not a bug.

In financial markets, tariff uncertainty has returned as a consistent source of volatility. Reuters has reported that renewed tariff threats helped drive selloffs across multiple asset classes and pushed volatility measures higher, echoing earlier “Sell America” moments when investors briefly shied away from U.S. risk. The result has been a market that can look calm one day and twitchy the next, even when underlying economic data is stable.

Meanwhile, the U.S. climate policy pivot is forcing its own kind of recalculation. The EPA’s move to revoke the “endangerment finding” — the legal keystone for federal greenhouse gas regulation — is expected to reshape the government’s authority to regulate carbon pollution and to trigger legal challenges that could take the issue back toward the Supreme Court. Supporters argue the rollback cuts regulatory costs; critics say it undermines public health protections and ignores the science the agency relied on for years.

Those policy crosscurrents land in a broader environment where “trust” has become a practical concern, not a vague talking point. Large global custodians and corporate finance teams are increasingly focused on hedging and contingency planning rather than assuming the old patterns will hold. BNY’s disclosure that clients are hedging U.S. dollar exposure at the most since late 2023 reflects that shift: investors aren’t necessarily fleeing U.S. assets, but they are paying more to protect themselves against swings they view as policy-driven.

Outside markets, the same stress-test logic is visible in alliances and institutions. In Europe, leaders meeting around the Munich Security Conference have openly debated how much they can count on the transatlantic relationship as U.S. policy becomes more unpredictable. In technology, governments are tightening digital rules even as companies warn that fragmented national approaches can harden borders in the online economy.

The week’s common thread wasn’t any single headline. It was the speed at which politics is now showing up in places that used to be ruled mostly by process — trade, regulation, alliances, currency hedging — and the way institutions are adapting by building backups, buffers and workarounds.