Tapas Strickland from NAB recently gave a talk about this Trump Trade War.

He said China could respond to any trade downturn caused by tariffs by putting in additional stimulus measures

Not sure what they will be stimulating though

Replying to my earlier comment about Tapas Strickland from NAB on Trump Trade War

Looks like he was correct about China using stimulus. But the stimulus is directed towards housing consumption by boosting "personal income"

I guess that means posting cheques in the mail.

Probably not the sort of stimulus we were looking for but it has created a rally among IO miners today such as scorned MinRes and services companies such as ALS Labs

It's a pity no one talks about ALQ that much here. I guess everyone hates it here even though the price goes up.

Hi @edgescape

I am a long time holder since Campbell Bros...So even though I don't speak up much, now, I DO appreciate your & everyone else's posts on this site & I am a believer in ALQ

Happy Investing

mmff

@mmff No worries

ALQ does definitely seem underappreciated here.

Maybe the new CEO is not the most articulate or appealing leader?

Or maybe we just like talking about small caps and s***cos more?

I still remember buying some ALQ at the height of Covid and selling at a great return.

Either way ALQ share price seems to be doing pretty well compared to the rest of the most active strawman stocks here.

Interesting times. To say the least

This is quite different from previous market crashes that I have experienced in that it is entirely self inflicted by policy choices. Very different from, for example, the COVID crash, the financial crisis or the dotcom crash. Likely to be very volatile going forward, and dependent on evolving US policy choices. I certainly can't predict how that will go. I'm not sure anybody else can either

The big question obviously is how to play it. I don't think I am doing anything today. But some stuff is definitely starting to look pretty cheap.I am considering deploying some cash. Also I am tempted to sell some healthcare stocks (eg CSLSonic), which are actually up today, in order to buy some stuff that is "on sale"

My personal watchlist (all looking like good value to me):

PLS

CAT

WHC and NHC

AVA

AD8

TLX and NEU

Really interested to hear more about what other people are thinking and doing

@Goldfish I am not doing anything specifically as there is too much risk of making dumb decisions.

Taking a step back, over the last 4-5 months I had trimmed quite a few positions where I felt valuations were looking a bit "peaky", leading to accumulating about 15% cash in my ASX portfolio. (Now I wish when @Strawman asked me during my interview why I was holding so much cash, I'd answered "Because Trump is going to tank the market early next year". But I didn't really think that would happen!)

Over the last month or so, including into this week, I have been deploying the cash in two ways: 1) high quality stocks where I have high conviction and am being offered a reasonable price ($BRG, $TNE, $WTC, $RMD, $NWL, $REA) and 2) some of my favoured growth stocks that have been on pull-backs ($AD8, $AIM, $CAT, $SPZ, $TLX).

Basically, that's just my ongoing process of moving capital into the stocks where I think I will get the best returns. There's no macro-thinking involved.

But I think my work is now done for a while, and I am just going to sit back and watch. I'm happy that all of my holdings will still be in good shape in 12 months time, so checking the market every 5-minutes isn't doing me any good!

(Oh, one thing I did do last week is draw down another 12-months of cash from my global (non-ASX) portfolio. I wanted to make sure I don't become a distressed seller, and I'll also have some large tax bills to pay from ASX capital gains! I wasn't being cute with the timing, just lucky, as my overall cash reserve had fallen below where I need to keep it, and I do the same every year around this time.)

Doing nothing today has largely worked out but only after being belted yesterday lol

Similar boat to you @mikebrisy. Had about 20% cash courtesy mainly of ALU takeover proceeds which I have had trouble finding a home for. That 20% cash became over 25% cash as the equity compoonent of the portfolio lost value so I have stepped in the last 2 days. Coincidentally my purchases have been similar to yours - BRG, RMD, NWL, RUL, AD8, AIM. Today I initiated my first ever position in TNE so am happy with that but looking to buy more hopefully further lower. Have also purchased some stocks currently under takeover such as TRS and AVJ for the franking credits associated with the dividend. I've calculated that the annualised return is over 30% for a SMSF but one must be confident that the takeover deals go through as the downside is quite large considering where these stocks were prior to the takeover offer.

I typically don't step in front of ugly downtrends like this, but I added modestly to my holdings in FID and XRF today. Not at a full weight for both, and the temptation was too hard to resist.

Interesting article from Roger Montgomery:

"Trump’s tariff gambit was meant to project strength and fairness, but it’s delivered chaos and exposed a troubling truth: the numbers driving this upheaval are little more than a mirage. As many begin to dig into the discrepancies, and as their investigations peel back the curtain, the administration faces a reckoning. Global trade is a complex beast, not a playground for simplistic math tricks. Unless cooler heads prevail, the calamity we’re witnessing may only just be beginning."

https://rogermontgomery.com/category/market-commentary/

Had to have a giggle when I saw this on multiple sites over the weekend:



The Accusations and the Formula Behind the Tariffs

The theory initially emerged to prominence when Destiny, a known political commentator, posted on X (formerly Twitter) how the Trump administration had allegedly utilized ChatGPT to come up with the tariff percentages of other countries, according to the report.

Destiny, who goes by @TheOmniLiberal on X, claimed that the tariffs did not make sense and were based on a simplistic equation of dividing the US trade deficit with a country by the overall imports from that country, reported LA Times.

He supported his claims by putting up screenshots of his own exchange with ChatGPT, in which he asked the AI bot to provide him with an "easy way to calculate the tariffs that should be imposed on other countries so that the US is on even-playing fields when it comes to trade deficit? Set minimum at 10%," quoted LA Times.

ChatGPT, in its response, offered a proportional tariff formula, suggesting that nations with bigger trade deficits should pay more tariffs, as per the report. The bot claimed that the tariffs would encourage more balanced trade between America and trading nations, according to LA Times.

Destiny | Steven Bonnell II on X: "I think they asked ChatGPT to calculate the tariffs from other countries, which is why the tariffs make absolutely no fucking sense. They're simply dividing the trade deficit we have with a country with our imports from that country, or using 10%, whichever is greater. https://t.co/SUu2syKbHS" / X

Was AI Truly Responsible for the Tariff Calculations?

The rumors that AI played a role in the making of tariffs gained rapid pace. Lawyer, journalist, and legal commentator John Aravosis explained on TikTok how each tariff was calculated by taking the United States trade deficit with another country and dividing it by the total imports from that country to the US, reported LA Times.

Aravosis said in the TikTok video, "Guys, they're setting U.S. trade policy based on a bad ChatGPT question that got it totally wrong. That's how we're doing trade war with the world," quoted LA Times.

Great discussion. US Credit Spreads are still relatively low so I don't think Trump will have a Liz Truss moment yet. But who knows what's about to break? It seems that successive US governments had build a finely tuned house of cards just that can't be altered very fast. 

You could make an argument that Trump will pull back from the edge soon. The first act may be almost over? I think he's been ticking off his bucket list: Independence Day speech achieved front page news in just about every country as he read each out one by one - Tick, he shielded Elon’s Tesla from China’s BYD invasion - Tick, he gave a nod to the MAGA hat’s from Detroit - Tick, DOGE shock and awe -Tick, Mexicans being expelled in chains - Tick… So perhaps his first 100 days will have hit a lot of his high profile visuals. So perhaps soon he will get a chance to back pedal and extend his gaze to the mid term elections (which will need the economy firing and his backers to be better off than an alternative)? 

China now has hit back at the tariffs already so the market has had time to consider a full blown trade war over the weekend. Perhaps Trump could get cold feet and pivot. Just blame the whole episode on bad intelligence or fake news or shift attention elsewhere. In which case, Monday might be a buying opportunity? Or the trade war escalates, or something breaks and triggers a crisis…

But I take comfort that this appears to be a policy-made correction/crash which could be reversed fairly easily and Trump wants to be loved by the public so it's really difficult to imagine him cratering the market for any length of time. 

Just on that "shielded Elon’s Tesla from China’s BYD invasion" comment of yours @actionman I had previously been under the impression that most Tesla vehicles are made in China, and while that does appear to be accurate - Google tells me this evening that while the Tesla Gigafactory in Shanghai, China, does indeed currently produce the most Tesla electric vehicles, including the Model 3 and Model Y, and serves as a primary export hub for Tesla vehicles, it doesn't mean they have to import them into the USA from China because (also according to Google AI) Tesla's two US factories in Fremont, California, and Austin, Texas, have a combined capacity of about 1 million vehicles per year, which is significantly more than the 663,000 vehicles Tesla sold in the US in 2024, indicating they produce enough within the USA to supply the US market.

And if media reports are even half accurate, their 2025 sales in the USA are likely to be well down on their 2024 sales. Although they do have to replace those vehicles that have been burned in their Tesla car lots.

So, yeah, big tariffs on imported cars into the US, particularly cheap EVs from China, does help Elon.

Elon has been relatively quiet on the tariffs, while backing Trump on every other decision he has made, however I think that the reluctance of Elon to fully embrace the tariff insanity is more to do with Musk being smart enough to understand the negative affect that trade wars and rampant inflation in the USA are going to have on his Tesla stock price (NASDAQ: TSLA) as the NASDAQ continues to crater in response to the tariffs and their likely impacts on global growth and the US in particular. He did after all put up his Tesla stock as collateral for the loan he got to buy Twitter (now "X"), which would be why, after the Tesla share price has halved recently, Elon's had do some financial engineering to use his AI venture company known as "xAI" to buy "X" off him - see here: BBC.com: Musk's xAI buys his social media platform X [29-March-2025]

Excerpt: Musk said the all-stock transaction values xAI at US$80bn and X at US$33billion ($45B less $12B debt). Musk paid US$44bn for Twitter in 2022.

Will likely get my fingers cut come tomorrow anyway. Well, I can hope they hold up better i.e. show some relative strength. (This is re: my buys on Friday :) )

Speaking of which, it hasn't been talked about much, but Bitcoin has decoupled from most other risk assets and is showing some good relative strength by hanging in there through a tumultuous week. Even gold has had a bit of a drawdown.

We need more of articles like this to confirm a bottom, atleast in market sentiment :) (This re: Monty's article)

Re Monty's article, author Michael Wolff was saying similar things to the AFR today:

“The main thing you have to understand about Trump is he was the star of a reality TV show for 11 years,” he says. “He knows how to keep the attention of the public: it’s conflict, conflict, conflict. The problem is that the conflict has to keep ramping up. You can’t have the same level of conflict. It has to get bigger and bigger, which, if you follow it through, means invading Greenland. Or Canada.”

“The most remarkable aspect of the tariffs thing is that Trump has got the whole world talking about tariffs,” Wolff says by phone a few days later. “We’ve gone from an archaic detail of trade policy to the most dramatic event in the world. The numbers make no sense. They came off the top of somebody’s head. But everybody’s forced to say ‘what does this mean?‘

“How he can turn tariffs into a dramatic device is total Trump genius. It is Trump as the reality show master.”

“Trump is not like you or me or anyone else we know. He is a crazy person. You can’t predict what a crazy man will do, and that’s frightening. All bets are off.”

https://archive.md/M5hcF#selection-1865.0-1865.161

I sure did put the commentator's curse on Bitcoin, didn't I? :D

Honestly @thunderhead , I cant believe how amazingly well it is holding up! In cycles past, BTC would be down 70% under these conditions.

And yet, looking at my watchlist right now:

It's the same story over the last week, month, 6 months etc

I'll let others draw their own conclusions as to why this might be the case :)

According to Roubini it’s a game of chicken between Trump, Powell, and Xi Jinping on who’s going to be blinking first.

Roubini on Bloomberg Television

Higher credit spreads, up 100 points in the past week, could break something if they continue to go up. A shock to P&L at the same time would cause a recession. Hopefully Trump blinks first.

“Trump is trying to nudge Powell to blink and ease monetary policy as a way to push markets higher. But Powell knows that, given what happened on April 2, if he blinks, there’ll be an anchoring of inflation expectation, and [that] is going to lead to higher inflation, so he’s not going to blink.”

Powell, though, doesn’t care about the share market as much as he does about increases in bond yields, Roubini said.

On Xi Jinping, he has more leverage than Trump because he doesn’t face an election. “When it comes to Xi Jinping, there’s the beginning of this game of chicken between Trump and Xi Jinping. I think Xi has more leverage [as] he doesn’t face an election next year. He can use monetary policy, fiscal policy, and currency policy and structural policy to strengthen domestic demand.”

“But it looks like Trump doesn’t want to de-escalate with China because he wants to corner China and to agree to a radical reduction of the trading balance between US and China.

“The rational thing to do for Trump will be to de-escalate because if he doesn’t, it is for sure a recession. If there is a recession, he loses the midterms, and then he’s politically gone.”