Sam Dickie: Fisher Funds expert on the future of Trump's tariffs - and what it could mean for the economy

With China and the US promising trade war escalations, economists are speculating about the future of the tariffs and how they'll impact global economies.

Some have have drawn parallels with the Great Depression - and warned the world should be prepared for a downturn. 

Fisher Funds expert Sam Dickie explains further.

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Episode Transcript

Speaker 1 (00:09):
You're listening to a podcast from News Talks'd be follow
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Heller Dooper see Alan.

Speaker 2 (00:18):
Sam Dicky from Fisher Funds is with us O.

Speaker 3 (00:20):
Sam, good evening here righting now.

Speaker 2 (00:22):
Oh thank you so much. Geez, I've come back straight
into the old trade war and what's going on with
the tariff headlines? How long is this going to go
on for?

Speaker 1 (00:29):
Do you think?

Speaker 3 (00:31):
Well? There are sort of really three types of beer markets.

Speaker 4 (00:35):
And remember a beer market is one where the market
falls by twenty percent or more.

Speaker 3 (00:39):
And we were their last Tuesday. So three types.

Speaker 4 (00:41):
An event driven beer market, a cyclical beer market, and
a structural beer market. So structural is where there are
structural imbalances or financial bubbles like the nineteen thirties Great Depression.
Cyclical beer market is a function of the economic cycle
turning down like the nineteen ninety recession. And an event
driven beer market it's the most benign of all. The

(01:01):
market falls because of a specific event like COVID. And
to be clear, this current situation is event driven, which
is the most benign, and the event was the Liberation
Day tariffs. Now that's not to say that everything that
comes out of Trump's mouth is a virus like COVID.
But Goldman Sacks did an exercise looking back almost two
hundred years, and event driven beer markets last only six

(01:23):
to eight months.

Speaker 2 (01:25):
Is there a possibility that an event driven beer market
becomes a structural beer market.

Speaker 4 (01:31):
Well, there's a possibility it can become a cyclical beer market.

Speaker 3 (01:35):
So you think about, you know, if you're sitting in.

Speaker 4 (01:38):
A boardroom in Hanoi or Mumbai, or Manchester or Milwaukee,
and you've been asked to sign off on a billion
dollar CAPEX project, for example, you'd probably sit on your hands, right,
And if consumers in business sit on their hands for
too long, we slip into recession, and the beer market
could last for longer. And a cyclical beer market can last,

(02:00):
you know, obviously longer than six to eight months.

Speaker 2 (02:02):
Yeah, and then obviously the worst case scenario is it
then becomes a structural one. And there's but the best
case scenario. What you're telling us is that we're talking
about a matter of months here.

Speaker 3 (02:10):
Yeah, that's right.

Speaker 2 (02:12):
Okay, are there any parallels in history here?

Speaker 3 (02:17):
Yeah?

Speaker 4 (02:17):
I think COVID is a reasonable parallel for event driven
beer market.

Speaker 3 (02:24):
Yeah, I mean, those are other parallels. I mean, looking
back two hundred years.

Speaker 4 (02:27):
There's been many event driven beer markets and the average
time these last is six to eight months. The average
time a cyclical beer market lasts about twenty seven months.
So that's sort of gold sex looking back over two
hundred odd years.

Speaker 2 (02:42):
So what are you looking for to kind of tell you,
to inform you as to where we're going with this
and whether it's improving or getting worse.

Speaker 4 (02:51):
I'd love to say we're able to ignore the haphazard
headline bombs coming out of the US, but really looking
for any signs of walking back some of the tariff
and posts on China. Any signs at the ninety day
pause on the rest of the world will result in
a permanent pause, but more so any sign that there
is movement towards his endgame.

Speaker 3 (03:10):
Of on shurreing US manufacturing.

Speaker 4 (03:12):
So you probably saw in video in the press yesterday
talking up spending half a trillion dollars over the next
four years to manufacture AI chips in the US, but Apple, Honda, Hyundai,
Volkswagen all making noises about wrapping up US manufacturing and
then just the US dollar itself. Think of that as
a popularity barometer for Trump, and the US is an
investment destination.

Speaker 2 (03:33):
Do you when you see these I mean a lot
of us are looking at some of the stuff that
he's backtracking on and he's sort of flip flopping, and
we're seeing it as signs that he's coming under pressure
and blinking and we're taking that as positive signs. Are you.

Speaker 3 (03:46):
Yeah? I think that's reasonable.

Speaker 4 (03:47):
We did discover as his pain threshold last Wednesday, and
the market always talks about finding the pain point tour,
looking for the where's the insurance policy at? And originally
the most benign view was you won't want to see
the equity market falling because that's a you know, it's
a popularity barometer.

Speaker 3 (04:06):
But he was clearly prepared to let the equity market.

Speaker 4 (04:08):
But when thirty year bond yields spiked higher as foreign
investors put a high risk premium on US government debt,
and remember ninety percent of mortgages in the US has
set off those rates, and then credit spreads spiked higher.
So credit spreads you slap on top of government bonds
to lend to you know, individuals or governments, a sorry,
individuals or businesses. That was his pain point, So equity

(04:32):
market weakness hurts Wall Street.

Speaker 3 (04:33):
That would rise and borrowing costs hurts everyone.

Speaker 2 (04:36):
Right, Sam, what's your advice to investors.

Speaker 4 (04:40):
Well, I can't give advice, but that the marketer is
watching those three assets, the US dollar, the third year bond,
and US credit spreads. They're all at slightly uncomfortable levels
but holding there for now. But more broadly, we've got
to remember at times like this, says equity investors, you
learn to stomach the sort of volatility every few years.
So two thousand and one, two and eight, twenty eleven,
twenty eighteen, twenty twenty, twenty twenty two, and now twenty

(05:02):
twenty five we saw these types of volatility as to
be expected to.

Speaker 3 (05:08):
Situation is fluid, but at the very least hither.

Speaker 4 (05:10):
I think it's a good chance to speak to your
financial advisor and check and make sure you're in the
right strategy for your risk tolerance.

Speaker 1 (05:16):
Yeah, very goodvice.

Speaker 2 (05:17):
Hey, thank you very much, Sam, appreciated. Happy Easter to
you that. Sam de Keia Fisher funds

Speaker 1 (05:21):
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