I didn’t expect leopards to eat MY portfolio

The internal contradictions of the Trump trade

Global equities fell around 2% on Monday this week following Donald Trump’s announcement of tariffs on Canada, Mexico and China. Equities recovered as Trump quickly walked back the tariffs on Canada and Mexico. The China tariffs still went ahead, prompting immediate retaliation and a WTO dispute filing.

The initial market reaction to the tariff announcement demonstrates that Trump’s threat to global trade was not fully priced. The equities leg of the Trump trade was always predicated on the assumption that whatever Trump did on trade would be offset by an otherwise pro-growth domestic policy agenda.

Appropriately enough, crypto was also smashed by the weekend tariff announcement, underscoring my long-standing view that crypto is a high beta cyclical asset and anything but a safe haven. If the Trump administration is a tech bro conspiracy to smash the US economy and get everyone into crypto (as some people maintain), then the conspiracy is its own worst enemy.