I see no sign Trump will accept zero tariffs in whatever negotiations he enters. This level of US protectionism IS new, it has never been tried in modern times. Trump was referencing events from 1913, even the 19th century. He has expressed a desire to switch the US tax base from income tax to tariffs, but there is no transition, it's a 240 volt shock to electrodes clamped on the genitals - flick the switch, and it doesn't even have a dimmer to increase the pain slowly. Xi Jinping will be betting he has insulated undies because he doesn't have to win elections or control nervous legislators as the mid-terms approach. So he will tough it out while America convulses. This will suppress FMG while China resists.
The market has a bit further to fall before it hits a level consistent with the chaos Trump is causing. My expectation is that any negotiations will be an opportunity for theatre which might cause a few bumps before people realise nothing has substantially changed, so we'll be in the cellar for a protracted period.
FMG Price at posting:
$14.32 Sentiment: Buy Disclosure: Held
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