Tariffs are inflicting economic damage that will force more companies to default on their debt, according to Polus Capital Management. “We do have a more substantial book of single name, high-yield credit shorts,” Robert Dafforn, the firm’s chief investment officer for opportunistic credit, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Tim Riminton in the latest episode of the Credit Edge podcast. “We think about it as the foothills before the mountain as you go on the slow ascent, and then it kind of picks up more broadly after that,” says Dafforn, referring to an increase in delinquency amid high interest rates and slowing growth. The CIO of Polus also discusses trouble brewing in the chemicals, building materials, packaging and consumer sectors, as well as “equity-like returns” for distressed-debt investors.