With his Greenland takeover and EU tariff threats, stocks are heading south big time. Will Trump do what he’s famous for and chicken out?

Our economic fortunes rest on two big markets — the property market and the stock market, with the latter the big driver of our super funds. Right now, the stocks are being trumped by Trump. It’s happened before, like last April with his over-the-top Liberation Day tariffs.

That took local and overseas stocks down. While the S&P/ASX 200 index slumped close to 8% in a few days, the anticipation of Trump’s tariffs actually saw stocks fall from February 17 to tariff revelations in the White House Rose Garden on April 2 that saw our market down over 14%!

Apologies in advance but I can’t help forgetting that ‘prickly’ experience as Trump revealed massive tariffs. It made me think: “Stock prices were in for it.”

Well, with his Greenland takeover and EU tariff threats, stocks are heading south big time. So, market commentators are suspecting that this is another Trump tough negotiating tactic, which creates a buying opportunity for stocks.

People like me instantly think about a former colleague, Anthony Scarramuci who says this about the President: “Trump always chickens out.”

Trump fans don’t see it that way, simply arguing this is the Trump tactic that has worked for him for decades of business deals. However, it’s been a long time since a political figure has held the world to ransom. In different ways Hitler, Stalin and Mao have spooked the world with strong man actions. Trump is using America’s economic dominance backed up by its military supremacy to do unusual things, such as arrest a South American president and his wife, demand Greenland and threaten US banks with a 10% cap on credit card interest rates.

His actions shock the world and derail stock market confidence. Overnight, European stocks slumped for the second day in a row. Now US stocks joined into the Trump trauma trade with the Dow, the S&P 500 and the Nasdaq down around 2%.

These are big one-day moves. It shows that this new tariff play from the US President is a big deal. And yep, gold continues to surge, showing that the queue of people outside ABC Bullion in Martin Place Sydney and other gold sellers around the country have got it right.

Gold is spiking on Trump-related fears. We have to hope that this short-term volatility isn’t a sign of things to come, long term.

Ironically, this bad news for stocks comes as our market was showing better signs of life. Our S&P/ASX 200 was up 2.5% since January 2 to last Friday, actually outpacing Wall Street. But since this tariff trumping threat of the EU and the Greenland takeover talk intensified, we’ve seen the market drop.

Ironically, these market fears that are sending global interest rates up comes as Australia’s main exports — mining and agricultural resources — were on a surge, which has helped their related stock prices. The BHP share price is up 18% over the past six months.

And as the AFR’s Cecile LeFort pointed out yesterday: “Australian farmers have had a cracking year across livestock and crops, outmanoeuvring US President Donald Trump’s trade wars and protectionist agenda.”

Our farmers are outpunching their rivals and the following facts show:

1. By the end of the 2026 financial year, our agricultural sector is set to be worth a record $100 billion.
2. Total agricultural exports are forecasted to be $80 billion, which would be a 14% increase in 2025.
3. Our farmers have been helped by the lower 10% tariff compared to other countries’ rivals.
4. A fall in US supply of beef has helped our producer increase market share in the US.
5. The Yanks now buy a quarter of all our beef exports.
6. And Chinese tariffs haven’t stopped our exports of beef rising there.
7. Canola farmers have gained from the Trump-Canada stoush and his trade battle with China.
8. Our almond growers are now the second most important in the world because of the US-China trade war and so on.

Clearly, we have to hope Trump chickens out on his ‘war’ against Greenland and the EU, so our stock market can resume its expected march higher.

While the courageous investor might see this sell-off as a buying opportunity, with an unpredictable guy like Donald Trump running the world, buying stocks has become more like punting rather than investing.

Let’s hope Donald ‘chickens out’ on this Greenland play.