Monday, 23 February 2026

Trumps latest tariffs - what shares am I buying now?

DJTs latest petulant fit of pique seems to be the final nail in the coffin for us non-USA investors. It seems that Europe do not want to depend on the USA for goods and services any more, and many large, unfinalised USA contracts are now on hold or even cancelled.

In particular, very large European defence contracts and energy contracts with the USA are in jeopardy.

This gives an even greater boost to EU and UK defence companies and also to large Emerging Markets companies, especially Korea.

The heavy expenditure of US Tech companies on AI has pushed up their P/Es to ridiculous levels while the $USD Fx rate still seems to be weakening. This has affected Amazon, nVidia, Google, Meta, etc. Also, nVidia is about to release its quarterly results this week. The EU is also talking about bypassing US financial dependence by creating a US-independent payment system and a digital Euro. This will be attractive to many other countries which desire to hold a stable currency, controlled by people who understand world economy (i.e sensible grown ups!).

Meanwhile, Tesla seems to be heavily invested in old lithium battery technology (it has $billions invested in lithium mines and processing). It's new battery may be cheaper to manufacture but it is also impossible to repair. The new sodium batteries from CATL will be the future as they do not use 'dirty' minerals, are safe, work in cold temperature, can be charged quickly and often, and use cheap non-toxic materials. Many car manufacturers plan to switch over to these new safer sodium batteries, especially as the energy density is also improving. This means that the 2nd-hand price of cars using lithium-ion batteries, even if LFP, will plummet. In my opinion, Tesla has dug itself into an expensive lithium hole.

I have been slowly divesting my USA-heavy ETFs and re-investing into UK\EU ETFs and Emerging Markets, commodities (gold, silver, copper, uranium) and Value ETFs.

Recently, this includes more Fresnillo (FRES), EU\UK defence ETFs (WDEP, FDNG) and EM ETFs (ISDE). I have also increased my holdings of BNKE Europe banks.

Summary

All this points to a downward spiral for the USA which will last many years. Trump is killing America and the people in power in the USA are too fearful of their jobs or too greedy to change anything.

I had hoped that USA Tech would bounce back, but now I see little chance.

What non-USA company or country will want to be heavily dependent on USA-based companies, services and technologies for the next 4 years when they will be at the whim of such greedy, bullying, stupid and corrupt people? DJT seems to be doing his best to escalate aggression and start wars, not sue for peace!.

All World ETFs are top-heavy with USA companies, so they will be greatly affected by the weakening $USD and the decline of USA Tech companies (magnificent 7), so I am now leaning even more towards ex-USA All World, Korean, EU and UK ETFs.

Look at the chart below - the standard core benchmark All World ETF SWDA has performed worse than an ex-USA All World ETF XMWX or the UK FTSE ETF IUKD (over 1, 3, 6 and 12 months).