The chairman of the world’s largest miner has warned the “whole world will be in trauma” if Donald Trump follows through with his election pledge to impose tariffs on China.
He said: “The whole world will start to be in complete trauma if tariff levels of that size and magnitude are put on across the board.”
However, he also pointed out that Trump’s policies would likely be “moderated” once he officially assumes office.
The comments of Nasser at the company’s annual meeting overnight in Brisbane do reveal a growing fear the President-elect will be a disaster for the industry.
Thus far, the consensus in the capital and commodity markets, at least, has been that Trump’s infrastructure plans could be good for the companies that provide the basic materials to build roads, schools (and walls); however, one London-based analyst on Wednesday suggested the market had perhaps mispriced the risks.
“Significant uncertainty remains over the extent to which the Trump administration will deliver on campaign promises,” said Fraser Jamieson of JP Morgan Cazenove.
“However, we believe the market has focussed too strongly on the potential fiscal benefits while largely ignoring trade risks, and as a result metal prices have overshot near-term fundamentals, notwithstanding improved supply and demand fundamentals this year.”
Story by ProactiveInvestors