May 13, 2025 • 12 mins
A two-part interview with Rabobank’s Singapore-based global strategist. Part one: Is there no end to Trump's tariffs, despite his recent backflip with China and what happened to "Thrive in '25" for the world economy? Part two: What’s the best business to be in, in a troubled world - food or munitions? Who are the political and economic leaders on the world stage today? Will an American Pope get Trump to “calm the farm”?
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Episode Transcript
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Speaker 1 (00:00):
He is Rabobanks Singapore based global strategist. His name is Michael.
Every love having him on the country, Michael. Yesterday we
saw the ninety day pause, or the lifting of some
of Trump's Chinese tariffs. The result was the dal Jones
going up nearly three percent. Is this the beginning of
the end for tariffs and the beginning of a bright
(00:21):
new world?
Speaker 2 (00:23):
No. I'm going to more detail if you want, but
I think knows a good answer to start with.
Speaker 1 (00:28):
So that's a pretty short answer. Explain why it is
such a definitive.
Speaker 2 (00:32):
No, Well, you have to look at things in a
broader perspective. First of all, just to be boring and technical,
we still have a thirty percent tariff on China on
top of twenty five percent tariffs on two thirds of
Chinese goods legacy from the first trun presidency and the
Biden presidency. So technically two thirds of the stuff going
(00:54):
to the US places around a fifty five percent tariff.
That's not what you would call low by any standards.
The fact that it seems low in a way is
a victory for Trump. By having gone to such ludicrous extremes,
what's left now seems reasonable.
Speaker 1 (01:10):
Has Trump got a better deal than the Chinese. It's
only ten percent going the other wire, or have I
got that wrong as well.
Speaker 2 (01:16):
No, no, you're right, it's only ten percent going the
other way. So he's got a better deal in the
short term, even though, of course people are saying that
he folded. And if you look at certain things the
US have said and done, I would say you can
see they have drawn dotted lines on things where folds
could happen in the future, but they haven't folded them yet.
(01:39):
But the bigger picture is not only that those tariffs
are still in place, but the US has said, look,
they can go back up again if in ninety days
we don't get China to do what we want. And
then it comes back to the bigger picture perspective of
who things China can do what the US wants, And
if you look at what the US is demanding and
if you look at what China is prepared to supply,
it's really really hard, realistically to imagine that that deal
(02:04):
can be done. So if you're a cynic, you say, look,
the US was facing empty shelves and inflation in the
next couple of months, And that's true because they were
hoping China would already have buckled, and it didn't. Now
everyone's going to rush like stink to resupply from China,
to fill their inventories sky high to make sure this
can't happen again. And then when they've done that, the
(02:26):
US will be looking for round two. I would think,
one way or another, or at least doing the same
thing it was doing up until now, but just more slowly,
rather than ripping the plaster off in one go. That
strikes me as still being far more logical than suddenly
everyone's inking Kumbai around the campfire.
Speaker 1 (02:42):
Who currently has the stronger hand and the scheme of
strip poker?
Speaker 2 (02:47):
Oh wow, that's an interesting visual metaphor. I don't think
either of them have a very strong hand, because the
US doesn't make very much, obviously, and that's a real
problem when you don't get the stuff supplied by China,
and yet China doesn't have enough people to buy the
stuff of the profit margins they want to sell it
out without the US. Technically, the US are correct that
(03:09):
in historical terms, whoever is the person who's buying the
stuff has the whiphand. The customer is always right at
the end of the day, The problem is in the interim.
If China just says we are prepared to suffer the
pain of not supplying you with anything until you sweat
it out, you know more than we do. You can
see that the US does have to blink on that front.
(03:30):
But as I said, if they now restock, if every
retailer in the US is right, let's get in loads
and loads of inventory, they're in a better position to
then restart this whole circus in August.
Speaker 1 (03:42):
What happened to thrive and twenty five?
Speaker 2 (03:46):
I don't even know what that is.
Speaker 1 (03:48):
It's the saying you've got to survive twenty four and
thrive and twenty five. As in twenty twenty five the
world economy was going to come right. Then Trump came
along with this teriffs.
Speaker 2 (03:58):
Ah yeah, well that was said by idiots. To be honest,
I think the version of it that I heard in
markets was stay alive till twenty five. But really, you know,
to make a serious point alongside the flippant one I
just made. If that is from a financial market perspective
where I work, you're trading strategy to stay alive and
everything will be better next year, You're in the wrong job.
(04:19):
Because you haven't understood anything that led to the volatility
that we saw in twenty twenty four. And I warned
explicitly again and again and again in every forum I have,
including this one, of course, with gratitude that we were
going to have a really rocky road in twenty five.
I called it the year of living dangerously. I was
very explicit about that, and I said, the people thinking
(04:41):
everything was going to be right just because it was
a new year, well it's about as useful as the
tooth fairy and trying to make predictions that the reality
was always deeply, deeply concerning, and we've seen exactly that
play out.
Speaker 1 (04:52):
Can New Zealand thrive and other markets to counter Trump's
ten percent tariffs currently imposed on US.
Speaker 2 (05:00):
Well, the ten percent into the US is really neither
here nor there. I don't know anyone who's seriously concerned
about that. In the biggest scheme of things. What's much
much more important for New Zealand is a process which
will now be slowed down, partially by what was just
agreed between the US and China this week. Slowed down
but in no way avoided, which is the US pressurizing
(05:20):
every other country to come to the table and say, right,
let's do a deal. Part of that deal will be
more slowly than maybe it would have been before, but
you are going to freeze China out of your market.
You are going to start a process of gradual realignment
of supply chains so that you deal with the US
block rather than China. That process, as far as I'm
concerned as a global strategist, is still absolutely logs unloaded.
Speaker 1 (05:44):
Michael Avery with us Rabobanks, Singapore based global strategist and
part two of this interview, let's have a look at
what's the best business to be and food communitions?
Speaker 2 (05:56):
The blog a around wonder.
Speaker 1 (06:01):
Welcome back to the country, and welcome back Michael Ivery, Rabobanks,
Singapore based Global Strategists. As I teased before the break,
what's the best business to be in food or munitions
in twenty twenty five?
Speaker 2 (06:15):
Wow, you're not really giving me much of a choice.
If there's the only table that's literally what you call
a guns or butter choice, isn't it? As we used
to say in political terms, I actually think food in
one respect, one key respect here. First of all, you
have to have food. You don't have to have guns.
Although at the moment. Of course, everybody wants guns. But
(06:36):
another key one which people are ever loooking, which is this.
Right now, everyone's very gung ho about the military sector,
and I think rightly, I've been arguing that for years.
But if you're talking about producing the stuff, and if
you're talking about holding shares, you know, equity in that
kind of sector, you have to remember that once national
security gets involved, which it is, big profits aren't allowed.
(06:59):
There's a word for people and companies that make really
mega profits by selling things to the state that they
need in an emergency, and it's called profiteering. And I
don't know if you have any personal memory of how
profiteering used to be treated during things like World War Two,
but it involve bullets and not as gifts. So if
that's going to be the case, I would imagine that
(07:19):
if we have to rearm a lot more, it's going
to be a lot lower profit margins. With the government
saying this is too important for people to make a
lot of money doing, I don't see that happening in food.
I can see food being propped up by the state
in various different ways if necessary, and hopefully judiciously. In
terms of you know, key things like infrastructure, but you
still need to actually make a return on farming to
(07:41):
do it. So between the two, you know, someone who
likes markets, food, not guns.
Speaker 1 (07:46):
We're always on a state of turmoil here on planet Earth.
We've got Russia, the Ukraine, Israel, Hamas now India versus
Pakistan on the doomsday clock sort of scenario. Is this
the most unsettled we've been since I don't know, the
Cuban missile crisis of the early nineteen sixties.
Speaker 2 (08:06):
Well, we have had a couple of very big wars,
you know, in the past couple of decades, involving Iraq,
of course, which had a lot more death and destruction
than we're currently seeing. But in terms of the breadth
of the problem and the structural depth of the problem,
not in any one geography, but just in terms of
the entire picture we're looking at, Yes, because, as you've
(08:28):
heard me say many times over the years, Jamie, the
entire global architecture that we built post Cold War is
crumbling around us, absolutely crumbling. You might not feel it
on a farm in New Zealand day in, day out,
but I can assure you lots of people in other
geographies are and in fact, interestingly, if you look at
all the places you just listed and some of the
others that are on the you know, unfortunately on the
(08:49):
short list to be joining them, all of them are
key pivot points in terms of where we think global
trade flows or the borders of new global trade blocks
will sit. And that is not a coincidence in any way,
shape or form.
Speaker 1 (09:04):
Who impresses you on the world stage? Now, I know
Sakia Starmer doesn't impress British farmers one iota, but he
seems to be making himself felt on the world stage.
Could he be, then, you diplomat.
Speaker 2 (09:20):
No, let's go back to the short answer that I
really go on. I very much doubt it. You have
to basically start with a strong base at home. Now
he's got a very very strong one in terms of
his position in Parliament, that's undeniable. But if you actually
look at where he is in the opinion polls right now,
it's very low and almost every policy that he appears
to be putting forward at the moment is going down
(09:42):
like a lead balloon. So it's not that he isn't trying.
He's certainly doing what many prime ministers and presidents do
when they're in on a sticky wicket, which is, let's
try and look good internationally to build a bit of
kudos domestically. But it's honestly really going down like a
lead balloon so far.
Speaker 1 (09:57):
Okay, So it just boils down to Trump versus Shi Jingping.
Speaker 2 (10:02):
Well, Putin's in the mix too, and I wouldn't rule
out India's Modi Prime Minister Modi very powerful figure who's
certainly capable of implementing enormous changes depending on what he
decides to do, and even with Trump there in the
next few hours, the Prince Muhammad bin Salman in Saudi Arabia.
He's really a mover and shaker getting things done. So
(10:23):
there are people out there that really can shift things,
but not as many of them are the traditional European
or Anglo Saxon talking heads you know that we're used
to from the past. This is a different world now.
We have to listen to a broader variety of people.
Speaker 1 (10:38):
Could a Chicago born American pope get Trump to calm
the farm?
Speaker 2 (10:44):
Calm the farm?
Speaker 1 (10:45):
Another New Zealand saying okay.
Speaker 2 (10:48):
I like that one. I haven't heard that. Well, I
don't really think Trump listens to popes or priests that much.
I think it was entertaining in terms of a headline
to actually have a made in America pope, just when
we've got all the issue of tariffs going around, and
that we've got white smoke on the Pope and on
the rumored US China trade deal which came out of
(11:08):
Monday on the same day. So there's a bit of
a divine intervention there perhaps, But I don't think the
Pope himself is going to be directing any kind of
policy for the US, be it geopolitical or trade.
Speaker 1 (11:20):
Hey, on a lighter note, just to finish, Trump accepting
the seven four seven jumbo jet from the Katari royal
family worth nearly seven hundred million dollars. Of course he'd
accept that, he said, you'd be stupid.
Speaker 2 (11:32):
Not to Well, yeah, they offered me one. I'd take
one too. I don't necessarily think that it's completely appropriate,
although it is apparently a more nuanced argument than it's
being presented by some. But nonetheless not a good look,
and you know, looks so very important. But I'm not
actually the craziest said one we've had today. It's actually yesterday.
Last night. We got it quite late here in Asia
that Trump is apparently going to meet the president of
(11:56):
Syria today or he may do. That's the rumor. Who
is a former alcai A member, so that shows how
the world is changing. But the rumor is that the
president of Syria is offering to build Trump Tower in
Damascus where we still have massacres going on in the suburbs.
So it doesn't mean he's going to go along with it.
But you know, it's a wacky world of sports out
there at the moment. It really is.
Speaker 1 (12:16):
We live in the crazy world. Michael every Rabobanks, Singapore
based Global strate. I just love your time, love you
work here on the country.
Speaker 2 (12:23):
Thank you
He is Rabobanks Singapore based global strategist. His name is Michael.
Every love having him on the country, Michael. Yesterday we
saw the ninety day pause, or the lifting of some
of Trump's Chinese tariffs. The result was the dal Jones
going up nearly three percent. Is this the beginning of
the end for tariffs and the beginning of a bright
(00:21):
new world?
Speaker 2 (00:23):
No. I'm going to more detail if you want, but
I think knows a good answer to start with.
Speaker 1 (00:28):
So that's a pretty short answer. Explain why it is
such a definitive.
Speaker 2 (00:32):
No, Well, you have to look at things in a
broader perspective. First of all, just to be boring and technical,
we still have a thirty percent tariff on China on
top of twenty five percent tariffs on two thirds of
Chinese goods legacy from the first trun presidency and the
Biden presidency. So technically two thirds of the stuff going
(00:54):
to the US places around a fifty five percent tariff.
That's not what you would call low by any standards.
The fact that it seems low in a way is
a victory for Trump. By having gone to such ludicrous extremes,
what's left now seems reasonable.
Speaker 1 (01:10):
Has Trump got a better deal than the Chinese. It's
only ten percent going the other wire, or have I
got that wrong as well.
Speaker 2 (01:16):
No, no, you're right, it's only ten percent going the
other way. So he's got a better deal in the
short term, even though, of course people are saying that
he folded. And if you look at certain things the
US have said and done, I would say you can
see they have drawn dotted lines on things where folds
could happen in the future, but they haven't folded them yet.
(01:39):
But the bigger picture is not only that those tariffs
are still in place, but the US has said, look,
they can go back up again if in ninety days
we don't get China to do what we want. And
then it comes back to the bigger picture perspective of
who things China can do what the US wants, And
if you look at what the US is demanding and
if you look at what China is prepared to supply,
it's really really hard, realistically to imagine that that deal
(02:04):
can be done. So if you're a cynic, you say, look,
the US was facing empty shelves and inflation in the
next couple of months, And that's true because they were
hoping China would already have buckled, and it didn't. Now
everyone's going to rush like stink to resupply from China,
to fill their inventories sky high to make sure this
can't happen again. And then when they've done that, the
(02:26):
US will be looking for round two. I would think,
one way or another, or at least doing the same
thing it was doing up until now, but just more slowly,
rather than ripping the plaster off in one go. That
strikes me as still being far more logical than suddenly
everyone's inking Kumbai around the campfire.
Speaker 1 (02:42):
Who currently has the stronger hand and the scheme of
strip poker?
Speaker 2 (02:47):
Oh wow, that's an interesting visual metaphor. I don't think
either of them have a very strong hand, because the
US doesn't make very much, obviously, and that's a real
problem when you don't get the stuff supplied by China,
and yet China doesn't have enough people to buy the
stuff of the profit margins they want to sell it
out without the US. Technically, the US are correct that
(03:09):
in historical terms, whoever is the person who's buying the
stuff has the whiphand. The customer is always right at
the end of the day, The problem is in the interim.
If China just says we are prepared to suffer the
pain of not supplying you with anything until you sweat
it out, you know more than we do. You can
see that the US does have to blink on that front.
(03:30):
But as I said, if they now restock, if every
retailer in the US is right, let's get in loads
and loads of inventory, they're in a better position to
then restart this whole circus in August.
Speaker 1 (03:42):
What happened to thrive and twenty five?
Speaker 2 (03:46):
I don't even know what that is.
Speaker 1 (03:48):
It's the saying you've got to survive twenty four and
thrive and twenty five. As in twenty twenty five the
world economy was going to come right. Then Trump came
along with this teriffs.
Speaker 2 (03:58):
Ah yeah, well that was said by idiots. To be honest,
I think the version of it that I heard in
markets was stay alive till twenty five. But really, you know,
to make a serious point alongside the flippant one I
just made. If that is from a financial market perspective
where I work, you're trading strategy to stay alive and
everything will be better next year, You're in the wrong job.
(04:19):
Because you haven't understood anything that led to the volatility
that we saw in twenty twenty four. And I warned
explicitly again and again and again in every forum I have,
including this one, of course, with gratitude that we were
going to have a really rocky road in twenty five.
I called it the year of living dangerously. I was
very explicit about that, and I said, the people thinking
(04:41):
everything was going to be right just because it was
a new year, well it's about as useful as the
tooth fairy and trying to make predictions that the reality
was always deeply, deeply concerning, and we've seen exactly that
play out.
Speaker 1 (04:52):
Can New Zealand thrive and other markets to counter Trump's
ten percent tariffs currently imposed on US.
Speaker 2 (05:00):
Well, the ten percent into the US is really neither
here nor there. I don't know anyone who's seriously concerned
about that. In the biggest scheme of things. What's much
much more important for New Zealand is a process which
will now be slowed down, partially by what was just
agreed between the US and China this week. Slowed down
but in no way avoided, which is the US pressurizing
(05:20):
every other country to come to the table and say, right,
let's do a deal. Part of that deal will be
more slowly than maybe it would have been before, but
you are going to freeze China out of your market.
You are going to start a process of gradual realignment
of supply chains so that you deal with the US
block rather than China. That process, as far as I'm
concerned as a global strategist, is still absolutely logs unloaded.
Speaker 1 (05:44):
Michael Avery with us Rabobanks, Singapore based global strategist and
part two of this interview, let's have a look at
what's the best business to be and food communitions?
Speaker 2 (05:56):
The blog a around wonder.
Speaker 1 (06:01):
Welcome back to the country, and welcome back Michael Ivery, Rabobanks,
Singapore based Global Strategists. As I teased before the break,
what's the best business to be in food or munitions
in twenty twenty five?
Speaker 2 (06:15):
Wow, you're not really giving me much of a choice.
If there's the only table that's literally what you call
a guns or butter choice, isn't it? As we used
to say in political terms, I actually think food in
one respect, one key respect here. First of all, you
have to have food. You don't have to have guns.
Although at the moment. Of course, everybody wants guns. But
(06:36):
another key one which people are ever loooking, which is this.
Right now, everyone's very gung ho about the military sector,
and I think rightly, I've been arguing that for years.
But if you're talking about producing the stuff, and if
you're talking about holding shares, you know, equity in that
kind of sector, you have to remember that once national
security gets involved, which it is, big profits aren't allowed.
(06:59):
There's a word for people and companies that make really
mega profits by selling things to the state that they
need in an emergency, and it's called profiteering. And I
don't know if you have any personal memory of how
profiteering used to be treated during things like World War Two,
but it involve bullets and not as gifts. So if
that's going to be the case, I would imagine that
(07:19):
if we have to rearm a lot more, it's going
to be a lot lower profit margins. With the government
saying this is too important for people to make a
lot of money doing, I don't see that happening in food.
I can see food being propped up by the state
in various different ways if necessary, and hopefully judiciously. In
terms of you know, key things like infrastructure, but you
still need to actually make a return on farming to
(07:41):
do it. So between the two, you know, someone who
likes markets, food, not guns.
Speaker 1 (07:46):
We're always on a state of turmoil here on planet Earth.
We've got Russia, the Ukraine, Israel, Hamas now India versus
Pakistan on the doomsday clock sort of scenario. Is this
the most unsettled we've been since I don't know, the
Cuban missile crisis of the early nineteen sixties.
Speaker 2 (08:06):
Well, we have had a couple of very big wars,
you know, in the past couple of decades, involving Iraq,
of course, which had a lot more death and destruction
than we're currently seeing. But in terms of the breadth
of the problem and the structural depth of the problem,
not in any one geography, but just in terms of
the entire picture we're looking at, Yes, because, as you've
(08:28):
heard me say many times over the years, Jamie, the
entire global architecture that we built post Cold War is
crumbling around us, absolutely crumbling. You might not feel it
on a farm in New Zealand day in, day out,
but I can assure you lots of people in other
geographies are and in fact, interestingly, if you look at
all the places you just listed and some of the
others that are on the you know, unfortunately on the
(08:49):
short list to be joining them, all of them are
key pivot points in terms of where we think global
trade flows or the borders of new global trade blocks
will sit. And that is not a coincidence in any way,
shape or form.
Speaker 1 (09:04):
Who impresses you on the world stage? Now, I know
Sakia Starmer doesn't impress British farmers one iota, but he
seems to be making himself felt on the world stage.
Could he be, then, you diplomat.
Speaker 2 (09:20):
No, let's go back to the short answer that I
really go on. I very much doubt it. You have
to basically start with a strong base at home. Now
he's got a very very strong one in terms of
his position in Parliament, that's undeniable. But if you actually
look at where he is in the opinion polls right now,
it's very low and almost every policy that he appears
to be putting forward at the moment is going down
(09:42):
like a lead balloon. So it's not that he isn't trying.
He's certainly doing what many prime ministers and presidents do
when they're in on a sticky wicket, which is, let's
try and look good internationally to build a bit of
kudos domestically. But it's honestly really going down like a
lead balloon so far.
Speaker 1 (09:57):
Okay, So it just boils down to Trump versus Shi Jingping.
Speaker 2 (10:02):
Well, Putin's in the mix too, and I wouldn't rule
out India's Modi Prime Minister Modi very powerful figure who's
certainly capable of implementing enormous changes depending on what he
decides to do, and even with Trump there in the
next few hours, the Prince Muhammad bin Salman in Saudi Arabia.
He's really a mover and shaker getting things done. So
(10:23):
there are people out there that really can shift things,
but not as many of them are the traditional European
or Anglo Saxon talking heads you know that we're used
to from the past. This is a different world now.
We have to listen to a broader variety of people.
Speaker 1 (10:38):
Could a Chicago born American pope get Trump to calm
the farm?
Speaker 2 (10:44):
Calm the farm?
Speaker 1 (10:45):
Another New Zealand saying okay.
Speaker 2 (10:48):
I like that one. I haven't heard that. Well, I
don't really think Trump listens to popes or priests that much.
I think it was entertaining in terms of a headline
to actually have a made in America pope, just when
we've got all the issue of tariffs going around, and
that we've got white smoke on the Pope and on
the rumored US China trade deal which came out of
(11:08):
Monday on the same day. So there's a bit of
a divine intervention there perhaps, But I don't think the
Pope himself is going to be directing any kind of
policy for the US, be it geopolitical or trade.
Speaker 1 (11:20):
Hey, on a lighter note, just to finish, Trump accepting
the seven four seven jumbo jet from the Katari royal
family worth nearly seven hundred million dollars. Of course he'd
accept that, he said, you'd be stupid.
Speaker 2 (11:32):
Not to Well, yeah, they offered me one. I'd take
one too. I don't necessarily think that it's completely appropriate,
although it is apparently a more nuanced argument than it's
being presented by some. But nonetheless not a good look,
and you know, looks so very important. But I'm not
actually the craziest said one we've had today. It's actually yesterday.
Last night. We got it quite late here in Asia
that Trump is apparently going to meet the president of
(11:56):
Syria today or he may do. That's the rumor. Who
is a former alcai A member, so that shows how
the world is changing. But the rumor is that the
president of Syria is offering to build Trump Tower in
Damascus where we still have massacres going on in the suburbs.
So it doesn't mean he's going to go along with it.
But you know, it's a wacky world of sports out
there at the moment. It really is.
Speaker 1 (12:16):
We live in the crazy world. Michael every Rabobanks, Singapore
based Global strate. I just love your time, love you
work here on the country.
Speaker 2 (12:23):
Thank you
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