New Delhi [India], May 22 (ANI): Amid the ongoing tariff uncertainty by US President Donald Trump, businesses are likely to delay any new investment and this has the potential to trigger a global slowdown, according to a report by Nomura.

The outlook for the global economy and financial markets remains highly uncertain as President Donald Trump's aggressive tariff policy continues to send ripples across industries and borders, according to a detailed analysis by Nomura Research Institute.

The report said, 'Businesses are likely to shelve, scale back, or delay new investments as long as concerns remain elevated, and that has the potential to trigger a global economic slowdown or recession.'

The report outlined the unfolding drama of the Trump administration's tariff strategy in three phases, shock, backlash, and tactical recalibration, while warning that unpredictability in U.S. policymaking under President Trump poses a significant ongoing risk.

Following the April 2 declaration of steep reciprocal tariffs, financial markets were rocked by a rare 'triple decline' in U.S. stocks, Treasury bonds, and the dollar.

Although Trump paused the tariff rollout a week later amid backlash from key political donors and economic advisers, Koo argues that the policy's damage may already be done.

The report said, 'The reciprocal tariff announcement sparked a triple decline in stocks, bonds, and the US dollar. This suggests that at least some investors decided to sell their dollar-denominated assets.'

This pointed out that businesses are now more reluctant to commit to long-term investments due to fluctuating trade costs and fears of sudden policy reversals.

The report warned that businesses may now factor extreme tariff scenarios into long-term risk calculations, possibly suppressing investment for years.

Adding to the complexity is Trump's geopolitical strategy. His attempt to drive a wedge between China and its allies by courting North Korea and Russia has largely failed, with Beijing countering U.S. moves by offering significant economic incentives to keep those nations in its orbit.

Looking ahead, the report added the potential for a shift in strategy. With tariffs proving politically costly, Trump may attempt to address trade deficits through currency adjustments, a move that could lead to renewed volatility in foreign exchange markets.

Already, currencies like the Taiwanese dollar have appreciated sharply in anticipation of U.S. pressure.

In sum, Nomura's outlook remains cautious. The global economy could face prolonged headwinds if businesses and financial markets remain on edge due to unpredictable trade and diplomatic policies. (ANI)