Trump Tariffs and Your SMSF: What's the Next Move?

In-Depth Analysis of Trump’s Latest Tariffs and Their Impact on Global Markets Today, we’re breaking down Trump’s latest tariffs, which have shaken global markets and added even more uncertainty to the mix. It’s a messy situation, no doubt—but that doesn’t mean there aren’t opportunities. The key is being selective and focusing on stocks and sectors that can hold up in this environment and come out stronger on the other side. With Australia’s economy showing real signs of strain and the RBA likely rethinking its next move, now’s the time to position wisely. Let’s dive into what’s happening and where we see potential upside in the months ahead, with a focus on how global tariffs are reshaping economic landscapes and what it means for Australian investments. Australia’s economy is facing some serious headwinds, with fresh data confirming what we’ve been saying for a while—things aren’t as strong as they seem. Job vacancies dropped 4.5% in February and are now 31% below their peak, making it hard to argue that the labour market is still tight. On top of that, the trade surplus in goods shrank to just $3 billion, with export receipts down 22% over the past two years—and that’s before we even factor in the impact of U.S. tariffs. With these mounting challenges, we believe it’s crucial to take a strategic approach to selecting sectors that are likely to weather these changes, focusing on those that have the resilience to thrive even as broader economic conditions face turbulence. Source: United States – White House (2025) RBA Stance and How Its Future Moves May Shape the Economy Meanwhile, the Reserve Bank of Australia (RBA) is sticking to a restrictive stance despite clear signs of strain. The market now sees an 87% chance of a rate cut in May, with expectations for three to four cuts by year-end. If the RBA acknowledges its missteps, we think a 50-basis-point cut in May—25 basis points for what should have been done this month and another 25 for May’s meeting—would be a step in the right direction. Understanding these policy shifts is key to adjusting our strategy and positioning ourselves for potential market rebounds, particularly with the potential for further rate cuts to ease pressure on the broader economy. Global Repercussions of U.S. Tariffs: What It Means for Trade and the Australian Economy Globally, President Trump’s latest tariffs—the biggest since the late 1800s—are about to shake things up even more. The effective U.S. tariff rate is set to jump from 14% to 32%, surpassing the 24% peak from the Great Depression. China and the rest of Asia are taking the biggest hit, with tariffs ranging from 15% to 49%. With trade flows disrupted, we expect cheaper imports flooding into Australia and New Zealand, adding to disinflationary pressures. This is a pivotal moment for investors to look for opportunities in sectors that can thrive despite these disruptions, particularly those that are less reliant on global trade and are positioned to benefit from the changes in global supply chains and pricing dynamics. Source: DFAT/ABS TRIEC Database (2025) Identifying Resilient Sectors and Hidden Opportunities for Long-Term Value in a Turbulent Market That said, we’re not just sitting on the sidelines. We’re keeping a close eye on resilient sectors that are well-positioned for a rebound in the coming months. Industrials, energy, and mining are showing some strong potential, and we’re seeing some hidden gems in these spaces. Our mining portfolio has been a standout performer, outpacing the ASX 200 with a 4.9% gain in Q1 2025. While the market faces some short-term turbulence, we see plenty of opportunities to capture value and position for long-term upside, especially in industrials, energy, and mining sectors poised for significant recovery as global conditions stabilize. By focusing on high-quality stocks in these forward-looking sectors, we are confident that a well-positioned portfolio will thrive despite the broader challenges facing the global economy. Examining the ASX 200, we see two potential scenarios. A consolidation between 7,600 and 8,000 is likely, with a breakout above 8,000 signalling a rally to retest the all-time high. Conversely, a break to lower levels could see a retest of the medium-term support, which acted as resistance in 2023 before its early 2024 breakout. In a more bearish case, a second leg of the downtrend, similar to mid-February, could push the index toward 6,850. For now, we remain cautious while monitoring key levels. However, the current downturn presents exceptional opportunities in select quality stocks. We believe this is the time to focus on high-quality names, anticipating a potential rebound by late Q2 into the second half of the year. Your Dedicated Support at Investor Pulse At Investor Pulse, we’re more than just a platform – we’re a community of passionate investors. Our dedicated team of investment and trading experts is here to support you every step of the way. Whether you need assistance with stock selection, analysis, or have specific topics you’d like us to cover, we’re always available to help. Reach out anytime through the chat box in the members’ area, or feel free to email Mark directly at mark.elzayed@investorpulse.com.au. Top Three Stocks Worth Considering Right Now Perseus Mining Ltd (ASX: PRU) – Up +26% YTD With the ongoing concerns surrounding tariffs and the unpredictability of the Trump administration’s policies, gold is becoming an increasingly attractive asset. Gold has traditionally been seen as a safe haven during times of political and economic instability, and this moment is no different. Perseus Mining Limited (ASX: PRU) stands out as a strong contender for investors looking to gain exposure to gold, especially given the current climate of uncertainty. Why Gold Is Gaining Attention The ongoing volatility surrounding U.S. trade policies, particularly with China, has created a cloud of uncertainty in the markets. The Trump administration’s unpredictable stance on tariffs is making global economic conditions more fragile, which is why many investors are turning to gold for stability. Historically, when uncertainty rises, so does the demand for gold, as it is often seen as a hedge against inflation and economic disruptions. In this context, gold has the potential to outperform, especially as the U.S. government’s policies continue to evolve. Perseus Mining’s Solid Position Perseus Mining presents an excellent way to gain exposure to the gold sector. The company operates three gold mines in West Africa: Edikan in Ghana, and Sissingue and Yaoure in Côte d’Ivoire. It also owns the Meyas Sand Gold Project in Sudan, which gives the company a diversified geographical footprint. This is a key strength, as it reduces the risk of being overly reliant on one market or political environment. In terms of financials, Perseus has been executing well. For the six-month period ending December 2024, the company produced 253,709 ounces of gold. Despite inflationary pressures pushing up costs, Perseus benefited from a strong hedging strategy and a higher average sales price for gold. The company’s average sales price was US$2,350/ounce, significantly higher than the previous year’s average of US$2,000/ounce. This increase in gold prices, combined with solid production numbers, led to a 19% increase in revenue, from US$489 million in 2023 to US$581.8 million. Looking at Perseus’s mines, the performance has been solid across the board. At the Yaoure mine in Côte d’Ivoire, the company produced 123,158 ounces of gold at an All-In-Sustaining Cost (AISC) of US$1,124/ounce. This was within the high end of their market guidance, which was 108,000 to 124,000 ounces. The AISC was also lower than their upper AISC guidance, which was US$1,175 to US$1,275/ounce, making Yaoure a strong contributor to the company’s overall performance. The Sissingue mine, also in Côte d’Ivoire, produced 33,917 ounces at a higher AISC of US$1,701/ounce. This was slightly above their AISC guidance of US$1,500 to US$1,600/ounce, primarily due to lower ore production and higher waste mining at their Fimbiasso pit. While this was a bit higher than anticipated, it still aligns with the volatility in the market, which investors need to be mindful of. At the Edikan mine in Ghana, Perseus saw its best performance, producing 96,634 ounces at a remarkably low AISC of US$1,022/ounce. This was at the lower end of their guidance, which was US$1,200 to US$1,300/ounce. The low AISC at Edikan reflects the efficiency of Perseus’s operations in Ghana and its ability to keep production costs in check, even as overall costs rise elsewhere. Strong Financial Position One of the key factors that make Perseus Mining attractive is its solid financial position. The company ended the half-year with a net profit after tax of US$201.1 million, a 22% increase from the previous year’s US$164.7 million. This growth was supported by a 26% increase in gross profit, which came in at US$265.3 million for the period. The company’s strong operating margin, driven by higher gold prices and strong production, helped them generate net cash from operating activities of US$247.6 million, up 17% from US$211.2 million the year before. With cash on hand of US$628.5 million as of December 2024, Perseus is in a strong position to weather any volatility in the market. They also hold 29,078 ounces of gold bullion worth US$76 million, which provides an additional cushion in the face of market fluctuations. Their solid balance sheet and cash reserves allow them to remain agile and make strategic investments when opportunities arise. A Strong Pick for Gold Exposure In light of the ongoing political uncertainty and economic volatility in the U.S., Perseus Mining offers an attractive opportunity for investors looking to gain exposure to gold. With its diversified operations across West Africa and a solid track record of meeting production targets, Perseus is well-positioned to benefit from rising gold prices. West African Resources Limited (ASX: WAF) – Up +59% YTD West African Resources (ASX: WAF) is one of our high-conviction buys, with a clear path to becoming a 420,000+ oz per year gold producer by 2025. As an unhedged miner operating in Burkina Faso, WAF benefits from full exposure to gold price upside while maintaining strong financials and disciplined cost control. At our target price above USD 3.30 per share, we see +47% upside, driven by increased production, operational efficiencies, and exploration success. Strong 2024 Performance Sets the Stage for Growth WAF delivered a solid 2024, generating USD 246 million in profit. Production totalled 206,622 oz at an AISC of USD 1,240/oz, while unhedged gold sales came in at 199,550 oz at an average price of USD 2,391/oz. This resulted in USD 730 million in revenue and USD 252 million in operating cash flow, boosting the company’s cash position to USD 392 million and net assets to USD 1.3 billion. These figures highlight WAF’s ability to generate significant cash flow while maintaining a strong balance sheet. 2025: A Transformational Year with Kiaka Coming Online Looking ahead, WAF’s 2025 production guidance is between 290,000 and 360,000 oz, a major step up from 2024. This growth will be driven by stable production at Sanbrado and the ramp-up of Kiaka. Sanbrado is expected to contribute 190,000 to 210,000 oz at a site sustaining cost below USD 1,350/oz, while Kiaka will add another 100,000 to 150,000 oz when it starts production in Q3 2025. Kiaka’s development remains on track, with construction more than 90% complete and first gold pour expected in Q3 2025. Once fully ramped up, Kiaka will more than double WAF’s annual production, cementing its status as a multi-mine gold producer. An updated 10-year production plan, expected in Q2 2025, will provide further clarity on long-term growth potential. Exploration Upside with a Robust Drilling Program Beyond production growth, WAF is aggressively investing in exploration. A USD 20 million drilling program is planned for 2025, targeting high-grade extensions at M1 South, M5 South, and Toega. The company already boasts a 12.5 Moz mineral resource and 6.2 Moz ore reserve, but with over 115,000 meters of drilling planned, we see plenty of room for further expansion. WAF also holds a dominant 1,385 km² land package along the Markoye fault system, offering additional exploration upside. Cost Efficiencies Enhancing Margins WAF is focused on keeping costs in check. The Sanbrado grid power connection, expected to be completed in 2026, will reduce processing costs by USD 12 million per year, with a payback period of just 20 months. The company has also rebuilt its in-house drilling capacity, lowering exploration costs, and is exploring throughput optimization studies at both Sanbrado and Kiaka, which could push production beyond 500,000 oz per year over time. Valuation Disconnect Presents a Buying Opportunity Despite its growth trajectory, WAF remains undervalued relative to peers. With a strong balance sheet, no hedging, and a clear path to higher production, we see significant share price appreciation ahead. At our target price above USD 3.30 per share, WAF presents a compelling opportunity, and we believe the market will start recognizing its full value as the company executes its growth strategy. With production set to double, a rock-solid financial position, and significant exploration upside, WAF is well-positioned for a major re-rating. We reiterate our high conviction buy rating and expect continued value creation as the company advances toward its next phase of growth. CSL Ltd (ASX: CSL) CSL Limited (ASX: CSL), the biotechnology company, has shown strong growth and potential across its various segments, which include rare and serious diseases, influenza vaccines, and iron deficiency therapies. Despite its solid fundamentals, CSL’s share price has not fully reflected this strength due to broader market pressures. Given the current market environment, we are advising a “hold” for CSL at this time, estimating a fair value of $301 per share, though we anticipate consolidation around $250 per share in the near to medium term. Solid Revenue and Profit Growth, Despite Market Challenges For the first half of FY25, CSL reported impressive financial results. The company posted a total revenue of $8.48 billion, reflecting a 5% increase at constant currency compared to the same period last year. Net profit after tax (NPAT) came in at $2.01 billion, marking a 7% increase on a constant currency basis. Additionally, NPATA (Net Profit After Tax and Amortization) stood at $2.07 billion, up 3% year-over-year, with earnings per share increasing by 3% to $4.29, and 4% when adjusted for constant currency. The company declared an interim dividend of $1.30 per share (approximately AUD 2.08), representing a 16% increase from the previous year. Strong Performance from CSL Behring, Leading to Growth in Core Segments CSL Behring, the company’s largest business segment, delivered strong results with total revenue of $5.74 billion, up 10% at constant currency. The Immunoglobulin (Ig) product line was a key contributor, with sales rising 15% to $3.17 billion, driven by strong demand for PRIVIGEN and HIZENTRA. Haemophilia products also performed well, bringing in $731 million, an 11% increase, with growth in IDELVION and HEMGENIX, CSL’s gene therapy for haemophilia B. Despite this strong performance, CSL’s influenza vaccine business, CSL Seqirus, faced some challenges due to a low rate of influenza vaccinations, particularly in the United States. CSL Seqirus Faces Headwinds from Low Influenza Vaccination Rates CSL Seqirus, CSL’s influenza vaccine division, reported a 9% decline in revenue at constant currency, with total sales dropping to $1.66 billion. Low immunization rates, especially in the U.S., impacted the sales of FLUAD and FLUCELVAX vaccines, which were down 17% and 12%, respectively. While this segment’s performance has been weaker, CSL Seqirus remains a critical player in the global influenza vaccine market, with growth potential driven by its pre-pandemic preparedness strategy, including the award of several tenders for the current H5 Zoonotic (avian bird flu) outbreak. CSL Vifor Continues to Show Strong Growth in Iron Deficiency and Nephrology CSL Vifor, focusing on iron deficiency and nephrology treatments, reported revenue of $1.08 billion, up 6% at constant currency. Iron product sales rose 3%, driven by continued volume growth in Europe despite generic competition. The nephrology portfolio also performed well, with TAVNEOS showing strong growth across markets and FILSPARI exceeding expectations in Germany, Austria, and Switzerland. These segments continue to demonstrate their value, contributing significantly to CSL’s diversified revenue stream. Financial Strength and Cash Flow Position CSL for Long-Term Growth CSL’s financial position remains robust, with cash flow from operations increasing by 18% to $1.26 billion. This was driven by strong earnings growth and effective working capital management. The company’s balance sheet is in a strong position, with net assets of $20.55 billion. Capital expenditures decreased to $366 million due to lower investment spending, while proceeds from business disposals also contributed to CSL’s solid financial standing. Outlook for CSL: Navigating Challenges with a Focus on Long-Term Growth Looking ahead, CSL has reaffirmed its guidance for FY25, projecting revenue growth of 5-7% at constant currency. The company anticipates NPATA for FY25 to be in the range of $3.2 billion to $3.3 billion, representing a growth of 10-13% over FY24. CSL remains focused on improving gross margins, particularly through the completion of the RIKA plasmapheresis device roll-out by June 2025. Despite the challenges faced by CSL Seqirus, the company is optimistic about growing market share in influenza vaccines due to its differentiated strategy. Furthermore, the strong growth prospects in iron deficiency and nephrology, driven by CSL Vifor, provide a solid foundation for future earnings. Recommendation: Hold CSL Amidst Market Pressures, With Potential for Long-Term Growth CSL’s core business units are performing well, particularly CSL Behring, which continues to be a major growth driver for the company. CSL Vifor’s success in the iron deficiency and nephrology markets further supports the company’s solid outlook. However, the performance of CSL Seqirus in the influenza vaccine segment has faced challenges, and broader market pressures continue to weigh on CSL’s stock price. Given the company’s strong fundamentals, we estimate CSL’s fair value is $301 per share, but near-term consolidation around $250 per share is likely. As such, we advise a “hold” on CSL at present, with potential for significant upside once market conditions stabilize.