MSQ Capital’s Paul Miron says Trump’s return could reshape global trade and fast-track deglobalisation — with major consequences for Australia.
6 min
Regardless of whether you are a Trump supporter or not, given the stock market turmoil and what can only be interpreted as personal attacks on global trading partners, Trump is quickly becoming one of the most globally polarising presidential figures in US history.
The trade war threatens global economic stability and reverses 80 years of globalisation. Geopolitics shape the global financial landscape, resulting in trade wars, wars, and sanctions, forcing nations to rethink their economic strategies.
Expect significant volatility to continue because we are in for a bumpy and uncertain ride during the remaining term of Trump’s presidency; diversification across lowly correlated asset classes has never been more critical.
Trumpenomics might be the most crucial economic experiment in modern history, and if you think this has no impact on Australians, think again.
The US economy is the world’s largest consumer of products, and its trade deficit is running at US$147.9 billion per month. This is certainly not sustainable.
Federal debt stands at an all-time high of US$36.4 trillion, equating to 123% of GDP. This has been built up over decades because of the American consumer’s voracious appetite for cheap products delivered to them through globalisation.
However, the music has to stop one day to avoid continuing to fall into the inevitable debt spiral.
Trump argues that the fall in manufacturing in the US from 15.8% to 10.1% of GDP in the past 25 years has resulted in the single most significant deterioration in the living standards of the middle class, with the wealth being transferred to manufacturing economies such as China and Japan.
Despite Trump’s bizarre public interpretation of tariffs, they essentially tax US citizens’ consumption. Trump is infatuated by the Gilded Age in the US (1870 – 1900), when there was no personal income tax and governments raised most of their income through tariffs.
Over the past 80 years, globalisation has been a powerful growth engine, lifting billions out of poverty, lowering consumer prices, and fostering unprecedented economic interdependence.
For the US economy, globalisation enabled access to vast export markets, cheap imports, and global capital flows, keeping inflation in check and sustaining consumer demand.
Globalisation has delivered extraordinary prosperity to the US, with the complex, interconnected global supply network we enjoy today.
The benefits of this network have been built over decades, with many US firms opening complex international supply chains to extract maximum global competitiveness. We do not know how they will be impacted, what the unintended consequences of these companies needing to trade under the new world order will be, and how this will affect both US and global markets.
Before the Global Financial Crisis, global trade exceeded 60% of world GDP. Since then, geopolitical fragmentation, supply chain vulnerabilities, and rising protectionism have ushered in an era of deglobalisation. The peak of globalisation is widely considered to have occurred in the mid-2000s.
A deglobalisation trend gathered pace during the COVID-19 pandemic, highlighting countries’ vulnerabilities and sovereignty in severe crises. It is important to note that from an economic standpoint, we have reached a pivotal point where the benefits of globalisation have been fully absorbed by our current Western economies.
Therefore, the current costs of global trade outweigh the benefits and a growing group of economists such as Dani Rodrik, Richard Baldwin and Nouriel Roubini firmly support deglobalisation.
The irony of Trump’s intentions regarding tariffs is that they have a sound fundamental economic basis when applied evenly, fairly, and measuredly. They are not an attack on trading partners, but a tax placed on consumers.
However, when tariffs are intentionally imposed to harforeign countries, we enter a different geopolitical game, resulting in trade wars, shifting alliances, increased global tensions, conflicts, and the risk of wars.
1https://www.economist.com/international/2009/02/19/turning-their-backs-on-the-world
Two historical case studies provide glimpses of rational thinking that supports tariffs: the US-China trade war initiated by Trump in his first term in office, and Russia’s economic resilience under Western sanctions, offer valuable lessons for Australia.
While distinct in their circumstances, both examples underscore the importance of self-sufficiency, local manufacturing, and strategic economic policies to withstand external pressures.
During Trump’s first presidency, he launched a tariff war, primarily targeting China, to reduce the US trade deficit and encourage domestic manufacturing. His administration imposed tariffs on billions of dollars’ worth of Chinese imports, arguing that unfair trade practices and intellectual property theft had disadvantaged American businesses.
The strategy was designed to make imported goods more expensive, incentivising firms and consumers to buy domestically produced alternatives.
While the immediate effects included increased costs for US consumers and retaliatory tariffs from China, the broader goal was to shift supply chains, encourage domestic production, and reduce reliance on foreign economies. Some industries benefited—such as steel and aluminium manufacturing—while others, such as agriculture, suffered from reduced exports due to retaliatory measures.
The long-term impact remains debated, but the lesson is clear: economic policy tools, such as tariffs, can strategically reorient an economy toward self-reliance.
A parallel case is Russia, which, despite facing heavy sanctions from Western nations, after its 2014 annexation of Crimea and, more significantly, after its 2022 invasion of Ukraine managed to sustain and even grow its economy.
Sanctions aimed to cripple key industries, limit access to global financial markets, and pressure the government into compliance. However, Russia’s response was instructive. The country aggressively pivoted toward self-sufficiency, particularly in food and energy production.
Russia mitigated the impact of sanctions by increasing local manufacturing and shifting trade to non-Western partners such as China and India. The Ruble remained relatively stable due to strict capital controls and alternative trade agreements.
This demonstrated how a nation can adapt when forced into economic isolation by fostering domestic industries and securing alternative markets.
Perhaps it is worthwhile to delve into Trump’s psychology, which has been formed throughout his career, a businessman deeply rooted in high-stakes negotiation, underpinned by access to immense financial resources and brand capital.
Inheriting a real estate business from his father, Trump expanded the empire into Manhattan’s luxury property market, leveraging aggressive deal-making and media-savvy self-promotion.
Trump consistently positioned himself as a power negotiator, unafraid of risk or confrontation. This negotiating style, as erratic and aggressive, comes from a position of power and wealth, which has paid off all his life and is all that he knows.
Now, as President, he is applying the same leadership style while in charge of the largest economy in the world, as he has done throughout his life. Regarding the position on tariffs, do not expect any consistency; he will pivot and change his position as frequently as he changes his underwear, leaving everyone consistently guessing.
Meanwhile, Trump-esque logic and rationale will always justify his actions with gusto and unquivering confidence.
Perhaps this is where the high-risk strategy evolves. There is no doubt he is going for broke, and it is anyone’s guess as to where this will end. There may be global recessions with markets overwhelmingly turning pessimistic.
Alternatively, he will end up with low interest rates so that government debt is more manageable, thereby reducing income tax and regaining local popularity by reorienting the economy in record time as world leaders cave into Trump’s outrageous demands and hurt the Chinese economy. It is also plausible that straight base 10% tariffs are applied, with the exception of China; only time will tell.
Despite Trump’s overall strategy with tariffs in these unprecedented times, any politician, economy, asset class, or equity fund manager can go from hero to villain back, and then back to hero overnight.
Investors should take note and ensure they do not make decisions based on pure emotion and be led by animal spirits (the collective mood of the market).
Many economists and politicians have been calling for an emergency rate cut. This is highly unlikely, despite these recent events damaging consumer and business confidence. There are endless permutations on how this may impact our economy.
Our Reserve Bank Governor has on many occasions said that they make decisions based on data. There is still inflationary pressure that could be placed on our economy from the shifting nature of trade and geopolitics, and there is no need to rush to a decision that could be made in haste.
Whether Trump plays the long or short-term game, tariffs will accelerate the deglobalisation trend. Australia must focus on reducing import dependence, strengthening local manufacturing, and diversifying trade partnerships.
From an investment perspective, there has never been a more critical time to ensure the right diversification in one’s investment portfolio.
Despite the best research conducted by large fund managers regarding the correct composition of shares, fixed interest, alternative assets, and private funds within the portfolio, there is often a lack of understanding of how these types of, either black swan events or long structural changes to the economy, can set back one’s portfolio so considerably.
As a private credit fund manager, we can only see increased investor demand in Australia as there continues to be growing uncertainty and volatility in the equity markets.
Paul Miron has more than 20 years of experience in banking and commercial finance. After rising to senior positions for various Big Four banks, he started his own financial services business in 2004.
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Gold miners are emerging as a compelling way to navigate market uncertainty, with analysts pointing to strong cash flows, attractive valuations and rising profit margins. As gold prices stabilize above US$4,000 an ounce, mining stocks could offer investors both downside protection and long-term upside.
3 min
Gold is one of the market’s go-to hedges in rocky times. Don’t forget that gold miners’ stocks are too.
The stock market’s gains in 2026 belie the rocky macroeconomic picture: elevated inflation, heightened geopolitical tensions, and jitters about the artificial-intelligence trade. That backdrop, in theory, should be the time for gold to shine. Instead, the price of the yellow metal has tumbled more than 5% so far, after last year’s blistering 65% rally. In part, the U.S. dollar’s recovery has stymied gold, which benefited from the greenback’s weakness in 2025.
Even with the precious metal’s recent weakness, gold mining stocks could be the best way to profit from this year’s uncertainty.
Gold miners “are a valuable hedge against macro risks that would likely be damaging for equities,” BCA Research’s Noah Weisberger and Rishabh Shah wrote this week.
Concerns about the Federal Reserve’s next moves to tackle inflation, the increasingly crowded AI trade, and steep valuations for tech stocks are just some of the drivers that could help gold’s price get on even footing— and lead to even bigger gains for miner stocks.
These stocks’ prices tend to outpace gold’s moves, because the companies have fixed operational costs. So when gold’s price rallies, their profit margins soar, and vice versa. For instance, the VanEck Gold Miners GDX +7.39% exchange-traded fund has fallen 11% this year as the metal has slumped.
Now, gold’s price just needs to stabilize to help miners’ stocks take off, and that seems to be happening. The precious metal has recently found support above the $4,000 level, and has stuck in a narrow range since the end of June. But its price rose ever so slightly in July, ending a four-month losing streak for the metal. Technical analysis also suggests that gold is due for a comeback.
Barron’s recently wrote that the pullbacks for both gold miners and the metal itself are overdone. Senior technical analyst Doug Busch noted that the VanEck ETF is on the “verge of a breakout” and has the potential to hit $11o in early 2027, up more than 40% from its current price.
Gold miners also have more than their role as a market hedge going for them. Their fundamentals are solid, too, says Chris Mancini, portfolio co-manager of the Gabelli Gold Fund.
“Precious metals miners are generating substantial amounts of free cash flow given profit margins of over $2,000 per ounce, and are returning this cash to shareholders through buybacks and dividends,” he said in an email.
“Buying the miners is a cheap way to get exposure to the price of gold,” he added. His fund owns Newmont NEM +6.71%, a Barron’s stock pick last year, and Agnico Eagle Mines as top holdings, as well as miners Northern Star Resources, Endeavour Mining, and Kinross Gold K+8.59%.
Miners are better businesses than they used to be, the BCA team added.
“Capex is more disciplined, margins are high and rising…and they are largely independent of the AI story,” Weisberger, BCA’s head of equities, and Shah, a senior analyst, wrote.
That last part is key. AI is disrupting the software industry and many other services and information-oriented businesses, and investors have piled into AI stocks. But ChatGPT, Claude, Grok, and other large-language models aren’t going to replace the need to mine for metals.
“Equity portfolios can benefit from exposure to quality that is uncorrelated to AI risk, and gold miners fit the bill,” the BCA team said.
They recommend that investors buy the VanEck Gold Miners ETF, which owns top miners such as Agnico, Barrick Mining ABX +7.24%, and Newmont.
An important bonus for big gold miners’ stocks is that their valuations are attractive after the gold’s pullback, too. The VanEck ETF is now trading at just a little more than nine times next year’s earnings estimates. That’s a big discount to its five-year average price-to-earnings ratio of 14, according to FactSet.
What’s more, the ETF is currently valued at a more than 50% discount to the S&P 500 SPX -0.17%, which is trading for about 19 times earnings estimates for 2027. Mining stocks have typically traded at just a 25% discount to the broader market over the past five years. So there is significant upside for the group if valuations move back toward normal levels.
One factor that complicates mining stocks as a market hedge, of course, is if stocks bounce back, which has been the case so far in August.
But both the market and economic outlooks remain cloudy, and investors remain nervous about the Fed’s next moves and AI stocks. Gold miners should do just fine, even if the anxious mood on Wall Street persists.
