For nearly a century, the United States has been considered the safest and most profitable place to invest but Washington is now playing fast and loose with that inheritance, writes Luke Staden, founder of Staden Financial Management.

US dominance was built on soft power, political stability, the dollar’s role as the world’s reserve currency, and an almost religious commitment to capitalism.

But that is all changing. Tariffs designed to reduce the trade deficit have instead shredded trust with allies.

Their design has been as unpredictable as they’ve been damaging — at first resembling the work of a drunk AI with a grudge against penguins, and more recently looking like Donald Trump’s favourite tool for grabbing headlines or settling personal scores. (The rumour that India’s 50% tariff rate came after Modi refused to nominate Trump for a peace prize may or may not be apocryphal — but it feels on brand.)

Tariffs: a tax on the poor, a gift to the rich

Tariffs don’t just hit foreign exporters; they impose a consumption tax on American households. Prices rise not only on imported goods but also on locally produced alternatives. And who feels that squeeze the hardest? The poorest households — the same people who spend their earnings the fastest, fuelling economic growth.

By raising costs on those who spend quickly, tariffs slow the circulation of money in the economy, dragging down GDP. In practice, tariffs have been a tax on the poor used to subsidise tax breaks for the wealthy. And unlike the poor, the wealthy tend to hoard their gains like modern-day dragons perched on piles of gold — gold that does little to support growth.

The cost of a smaller deficit

Proponents argue that tariffs reduce the trade deficit. Even if that happens, the cure may be worse than the disease. A shrinking deficit means fewer dollars flowing abroad — and therefore less demand for US bonds.

Less demand raises borrowing costs, which is bad news when you’re servicing $37 trillion in debt. Rising interest costs could devour the federal budget faster than you can say “Treasury auction.”

The decline of soft power and checks and balances

Then there’s soft power. The gutting of USAID has undone decades of influence overnight. Other nations would kill for this kind of leverage; Washington seems determined to throw it away. For nearly a century, America’s carrot-and-stick diplomacy leaned heavily on the carrot. Today, it’s all stick.

Most of all, America has been trusted because of its system of checks and balances. In theory, Congress, the presidency, and the Supreme Court kept one another honest. In practice, the current administration’s corruption has gone largely unchallenged. That silence speaks louder than any Senate hearing.

Trust, once broken, is hard to rebuild. Even if tomorrow brought a miraculous reversal of policy, investors would still be left with an uncomfortable truth: uncertainty in the US system is at an all-time high.

Asynchronous investment strategies

In periods of uncertainty, the smartest strategy isn’t retreat but diversification. The goal isn’t to guess the single winner of tomorrow’s market — it’s to hold a mix of strategies that don’t all move together.

Two investments are asynchronous if they don’t move in tandem. For example, pair gold with high-risk tech stocks. When markets wobble and tech tumbles, gold usually shines as investors seek safety. That creates opportunity: sell gold at a high, buy tech at a discount, then ride the rebound. When tech recovers, rotate some profits back into gold.

In other words: don’t just brace for volatility. Exploit it.

Regional diversification

Geographically, the US is still a heavyweight. I’m not counting it out — far from it. Despite its current unpredictability, it may yet remain the best place to invest. But right now, it’s simply too risky to bet everything on that outcome.

The smarter play is to spread exposure across regions: the US, Europe, Asia, and selective emerging markets. The world’s obsession with the S&P 500 has left plenty of undervalued opportunities sitting on the table elsewhere. For long-term investors, these look like easy wins.

Global uncertainty doesn’t mean sitting on the sidelines; it means investing smarter. Diversification across assets and regions isn’t just risk management — it’s opportunity management.

For expats especially, investing globally isn’t optional anymore; it’s essential.

Contact Luke Staden of Staden Financial Management to set up a meeting and discuss your particular financial needs or check out the YouTube channel.