Despite recent trade deals between the U.S., European Union, and Japan, UBS is cautioning investors not to underestimate the lingering economic risks posed by elevated tariffs. According to Ulrike Hoffmann-Burchardi, Chief Investment Officer for the Americas and Global Head of Equities at UBS Global Wealth Management, even the moderated 15% tariff rate on most EU and Japanese goods will continue to act as a drag on global economic momentum. “The impact of tariffs can't be overlooked even though recent deals have provided greater clarity,” she said, warning that higher levies still create meaningful headwinds for growth.While UBS maintains a base case that the strength of the U.S. consumer should help the economy avoid recession, Hoffmann-Burchardi highlighted key risks that could derail the current market optimism. A sharper-than-expected rise in inflation or a more severe hit to corporate profit margins could shift the outlook quickly. “Investors should remain vigilant and not look past the potential risks of tariffs,” she added, underscoring the potential for renewed volatility if trade frictions flare again or inflationary pressures accelerate. This article was written by Eamonn Sheridan at investinglive.com.