Anyone concerned about the skittishness of the stock market right now should know a major force for investor anxiety is captured in one word — Trump!

Sure, there are concerns and questions about sticky inflation and maybe a slowing US economy, but these have been made more worrying by President Trump and his tariffs.

However, it might not all be bad news for Australia and two of our biggest and best companies. More on that after I look at the less positive implications of Trump’s trade war.

Stock markets are worried that tariffs could lead to higher prices in the US (tariffs do that) that could impede the downtrend of inflation there. Other countries could face higher costs because of tariffs and the fact that they have to source their inputs for business goods and consumer goods from alternative sources other than the US.

You can see what is happening and might happen when you see how the Canadians are responding to the Trump general 25% slug on all their goods going into the US, whenever they might start. The President has moved the start date to April 2 but that’s not the first change he’s made. These changes add to the uncertainty that has unsettled stock markets. In fact, overnight the President said the tariffs on Mexico and Canada will now start on March 4!

How countries react to the Trump tariffs is another question mark that investors must consume when working out whether they should stay long stocks or start to go more defensive.

On the subject to reactions, Canada at the government level has lined up $155 billion of counter-tariffs on US goods. But at the local level, ordinary Canadians are boycotting US goods, shops are not stocking US goods and it would not be great to be running a Starbucks store in Ontario, Quebec and British Columbia.

Canadians are looking for products with “Product of Canada” on the labels and taking US goods off their shopping lists. “Outraged by such talk from a nation that is supposed to be their closest friend, normally mild-mannered Canadians have been scrapping beach trips to Florida, booing the U.S. anthem when it plays before NHL and NBA games and boycotting all things American-made, including Netflix and produce,” LA Times reported on February 12. “With support from Prime Minister Justin Trudeau and other leaders, the boycott is gaining ground. Shoppers around the country are forgoing California-grown fruits and veggies in favor of more local fare, and bar patrons are trading Kentucky bourbon for Canadian rye.”

This kind of retaliatory ‘return fire’ action could easily be reproduced in the European Union (EU) and China when these guys cop their Trump tariffs. These kinds of obstructions to normal business ultimately will affect the bottom lines of companies and that’s why share prices have been negatively affected in recent weeks. Uncertainty can do that. Those with historical memories know the Smoot-Hawley Tariff Act, which was U.S. legislation passed in June of 1930 that raised import duties to protect American businesses and farmers, but it added considerable strain to the international economic climate and worsened the Great Depression.

I don’t want to over-hype the potential threats of tariffs, but they aren’t a ‘thumbs up’ measure that many economists would support. However, as one of Australia’s most respected business journalists, Stephen Bartholomeusz, has revealed, there could be a “silver lining in Donald Trump’s latest misguided threat”.

And it could favour BHP and Rio Tinto which are partners — 45% and 55% — in a copper mine in Arizona called Resolution Copper, which has been held up by officialdom for a mere 12 years! Environmental concerns and a native American tribe arguing cultural significance of the land have stood in the way of this mine starting to produce returns to shareholders.

Let me put in a nutshell why BHP and Rio could end up being Trump fans:

1. Trump is toying with tariffs on copper coming to the US.
2. The US imports 45% of 1.6 million tonnes a year from Mexico, Chile and Canada.
3. Resolution could produce 450,000 tonnes a year.
4. Trump has made it clear he wants to rebuild local copper supplies.
5. While the Biden administration sided with the mine’s opponents, the new guy in town is bound to back this mine getting to the starting line for production.

And if the President KO’s environmentalists to support this copper mine, the irony is that the kinds of industries Donald Trump is not a great fan of, namely wind turbines, solar, hydro, electric vehicles and batteries are all big users of copper.