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24 July 2026, 09:30 UTC Chief Investment Office GWM Investment Research

Trading times Blog Paul Donovan, Chief Economist, UBS GWM, UBS AG London Branch

The volume of global trade as a share of the world economy has risen for ten consecutive quarters, and is now the highest proportion of world economy activity in modern times. How is this possible in an era of tariffs and trade wars? Three reasons stand out.

Generally, trade wars are a US affair. Most of the rest of the world has continued to trade nicely with one another. The US is an important consumer market, but is not everything.

The US consumer has shown considerable reluctance to cut imports. The act of threatening tariffs before they take effect creates a lot of noise in data, but broadly, the US is importing about as much today as it did in 2024. The seemingly insatiable demand for artificial intelligence is part of that resilience.

There is evidence that tariffs are being avoided. Comparing China’s export data and US import data shows that China claims to be exporting 30% more value to the US than the US claims to be importing from China. This is not because 30% of ships are sinking mid-Pacific. This level of distortion is unique to Sino-US trade. If imports from China are not identified as coming from China, the importer may pay a lower (or no) tax.

This report has been prepared by UBS AG London Branch. Please see important disclaimers and disclosures at the end of the document.

Global asset class preferences definitions The asset class preferences provide high-level guidance to make investment decisions. The preferences reflect the collective judgement of the members of the House View meeting, primarily based on assessments of expected total returns on liquid and commonly known indices, House View scenarios, and analyst convictions over the next 12 months. Note that the tactical asset allocation (TAA) positioning of our different investment strategies may differ from these views due to factors including portfolio construction, concentration, and borrowing constraints. Attractive: We consider this asset class to be attractive. Consider opportunities in this asset class. Neutral: We do not expect outsized returns or losses. Hold longer-term exposure. Unattractive: We consider this asset class to be unattractive. Consider alternative opportunities Note: For equities, we have a five-tier rating system with two additional preferences Most Attractive: We consider this asset class to be among the most attractive. Investors should seek opportunities to add exposure. Least Attractive: We consider this asset class to be among the least attractive. Seek more favorable alternatives opportunities. When equities are included with the other asset classes in the three-tier rating system, we collapse “Most Attractive” with “Attractive” and “Least Attractive” with “Unattractive.”

Appendix Risk information UBS Chief Investment Office's ("CIO") investment views are prepared and published by the Global Wealth Management business of UBS Switzerland AG (regulated by FINMA in Switzerland) or its affiliates ("UBS"), part of UBS Group AG ("UBS Group"). UBS Group includes former Credit Suisse AG, its subsidiaries, branches and affiliates. The investment views have been prepared in accordance with legal requirements designed to promote the independence of investment research. Generic investment research – Risk information: This publication is for your information only and is not intended as an offer, or a solicitation of an offer, to buy or sell any investment or other specific product. The analysis contained herein does not constitute a personal recommendation or take into account the particular investment objectives, investment strategies, financial situation and needs of any specific recipient. It is based on numerous assumptions. Different assumptions could result in materially different results. Certain services and products are subject to legal restrictions and cannot be offered worldwide on an unrestricted basis and/or may not be eligible for sale to all investors. All information and opinions expressed in this document were obtained from sources believed to be reliable and in good faith…