Binary Risk, Imperfect Hedges
The tariff is imposed or it isn't. The regulation passes or it doesn't. The supply chain breaks or it doesn't.
The only hedges available are continuous instruments for discrete events. Sector ETFs. Currency forwards. Index options. Proxies for a thing that either happens or doesn't.
Insurance exists, but insurance is adversarial by design. Claims-based. Slow. Vague triggers. Optimized to pay out less than it takes in.
The gap is obvious. The product is not.
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