Trump Tariffs and Trade Impacts

US President Donald Trump yesterday announced a whole range of new import taxes (tariffs) on goods imported to the USA. This BBC page gives you a list of major countries affected: https://www.bbc.co.uk/news/articles/c1jxrnl9xe2o

The president said the US had for more than five decades been “looted, pillaged, raped and plundered by nations near and far, both friend and foe alike”.

The UK will face a base tariff of 10% but it will be 25% on motor cars. But we are getting off lightly in comparison with many other countries such as China (54%) and the whole of the EU (20%). Aren’t you glad we left the EU?

These tariff rates are designed to not just be reciprocal rates to those imposed on US imports but also designed to compensate for non-tariff trade barriers such as regulations that discriminate against US products.

The negative impact on the UK stock market has been quite prompt as many UK companies export manufactured products to the USA. But you can also view these changes as giving a competitive advantage to UK manufacturers as tariffs imposed on their products will be less than from many other countries!

In reality many UK manufacturers have facilities in the USA – for example Rolls-Royce aero engines. This will offset some of the damage from tariffs.

What’s my view? Barriers to trade are never welcome as they depress economic activity. But the USA is not being unfair in trying to rebalance world trade more in their favour.

What’s your view?

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Should the Government Protect the Steel Industry?

The potential closure of the last blast furnaces in the UK has brought out politicians in force to condemn the deindustrialisation of the country. Even the Reform Party has commented on it with Richard Tice saying that the UK will be world leading in “naive stupidity”. The main question is should the Government protect “strategic” industries by subsidising loss-making businesses out of taxation. By “strategic” they mean an essential element in the engineering sector which is a cornerstone on which other companies rely.

I exchanged comments on X (Twitter) on this issue where I said “if other countries can make steel cheaper, let them” which got a vigorous response. The Telegraph even claimed that the Government was considering using terror laws to nationalise British Steel.

Now I recall debating the question of whether the Government should interfere in declining industries to protect UK engineering and other “key” industries with a Professor at Cranfield University when I was doing an MBA in 1985 – yes many years ago! The issues are still live it seems.

I do have an engineering degree but at the time I worked for a retailing company. My view has not changed. Our taxes should not be used to prop up declining industries even if there are a few votes to support it.

The Government published a consultation on a strategy for the steel industry in February – see here: https://www.gov.uk/government/consultations/input-into-the-steel-strategy/the-steel-strategy-the-plan-for-steel

There are alternative ways of producing steel instead of using blast furnaces – such as electric arc furnaces which can use scrap steel. And there are many alternative countries who can produce steel and who wish to protect their production as they are fool enough to do so. The world is not going to run out of steel.

If the Government is going to interfere in industries they should be supporting growth sectors not declining ones.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Benefits Squeeze and Moving to Isle of Man

There has been considerable negative comment on the Chancellor’s attack on social security benefits. There could be over 1 million people affected by substantial reductions in Personal Independence Payments (PIPs). I will avoid comment on the morality or necessity of this but the fact that there are such large amounts currently paid out which means the reduction could be up to £6,300 per year surely indicates that the scheme is quite generous at present – maximum payments under PIP can be up to £9,500 per year.

The reports reminded me to look at whether my wife would qualify for Carers Allowance which might be under attack as I am registered disabled and get an Attendance Allowance payment (it’s not means tested). That might qualify her for a Carers Allowance as she does the washing and sometimes takes me to doctor’s appointments. But the rules are so complicated this will take some time to look into. See https://www.gov.uk/carers-allowance/eligibility for details.  The whole system of financial support for disabled people needs simplifying.

Meanwhile should I research moving to the Isle of Man? The island’s parliament has decided to support assisted dying for residents which I wholeheartedly support while the similar English legislation is bogged down in delays. With very low income taxes (see https://taxsummaries.pwc.com/isle-of-man/individual/taxes-on-personal-income ) and no capital gains tax it looks very attractive now even if the weather might not be great.  

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Chancellor’s Spring Statement and MP Evans Webinar

I missed watching Rachel Reeves giving her Spring Statement live because it clashed with a presentation from M.P.Evans Group (MPE) I wished to watch – see below. But there were numerous reports I could read later. There were no great surprises. The Chancellor is aiming to save £3.4 billions on welfare payments and £3.6 billions on “other departmental” costs. But there is increased expenditure on the Justice Department to offset that.

A discussion on tv channels afterwards suggested that some benefit recipients, presumably those receiving Universal Credit payments, will lose over £4,000 per year. There is going to be some squealing as a result no doubt. But when you have to cut your budgets to stay solvent, then there is little option.

M.P. Evans Webinar

M.P. Evans Group is a producer of palm oil and associated products in Indonesia (mainly Sumatra). I recently purchased a few shares and the presentation of their final results was most informative – and kept me awake that is more than I can say for some webinars.

There was a useful slide showing the breakdown of the vegetable oil market. That includes rapeseed oil which I recently commented upon and am now avoiding. Palm Oil is now taking up a larger share of a growing market which now includes usage in biodiesel. Production by MP Evans was much the same as in the previous year despite challenges from dry weather but prices of palm oil increased so revenues and profits increased last year. They could therefore afford a17% increase in the dividend.

On a prospective p/e of 8.8 and a dividend yield of 4.8 according to Stockopedia the shares do not look expensive but there may be substantial risks from investing in a country with its main operations in Indonesia even if the company is registered in the UK and has a long track record. It will clearly be sensitive to commodity prices.

It was interesting to note that the war in Ukraine had an impact on the company as their costs are affected by the price of fertilizer.

I will do some more research on the company and track it for the moment.  

The MP Evans webinar was on the Investor Meet Company platform and will no doubt soon be available as a recording there.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Covid-19 Pandemic Five Year Anniversary

The BBC broadcast a documentary this week commemorating the five-year anniversary of the start of the Covid-19 epidemic. It is entitled “Love and Loss – The Pandemic: Five Years On”.

I watched it because I thought it might be of interest but it mainly consisted of individual sob stories. It didn’t attempt to trace the cause of the epidemic or the Government’s reaction to it. You can find the programme on BBC’s I-Player.

If you wish to trace the track of the epidemic and the prevention measures taken in the UK you might do better to read the diary I started in 2020 which was later published on Amazon under the title “A Journal of the Coronavirus Year”. See https://www.roliscon.com/journal-of-coronavirus-year for more details.

I started it because I thought I had little chance of surviving as I have a suppressed immune system but I never got the infection. That may be because I had numerous vaccinations for the disease and was careful to avoid crowds and public transport.

Some members of my family did seem to get infected but with relatively mild symptoms.

It is still unclear exactly where the disease originated from but it now seems likely that it escaped from a laboratory in China that were experimenting on viruses. The latest death toll from the disease is reported to be over 7 million worldwide.  

The cost of the epidemic had a major impact on the UK Government’s finances and we will learn the latest bad news on that later today when the Chancellor gives her spring statement.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Spring is Here

Spring is definitely here. The daffodils and narcissi in our garden are flowering (see photos) and other plants are sprouting. A tip: if you find that squirrels dig up your newly planted daffodils and eat them, switch to narcissi which are smaller but apparently less favoured for consumption.

Spring might be here and this seems to have made the UK stock market look a bit more attractive. It’s probably just temporary optimism as the economy is definitely in the doldrums. I have been purchasing small and mid-cap UK stocks but some of them have then promptly fallen. I must stop reading the share tipping publications! They are full of good “stories” and some of them certainly look cheap but the media rarely give you a balanced view.

Chancellor Rachel Reeves apparently plans to cut public expenditure so as to balance income with current expenditure but will it happen? I doubt it. Socialists have a propensity to spend other people’s money as I recall Margaret Thatcher said. Dismantling bureaucracies such as NHS England and all the numerous other quangos that have been invented in recent years will take both determination and money. At best it will take years to do unless we have a more forceful leader like the USA now has.

The only positive sector is defence where UK and other European expenditure will rise. But expenditure on defence does not make us wealthier. Bombs and shells create loud noises and kill people but they don’t make us richer or improve our lives.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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NHS England Scrapped and Fundsmith Annual Meeting

The Prime Minister has announced that NHS England is to be scrapped and its functions will revert to democratic control under the relevant Minister. There are over 15,000 people employed in NHS England and this abrupt dismantling of a system introduced in 2012 to give more independence and hopefully improve the performance of the NHS is to be scrapped. It clearly has not helped and has led to duplication of functions and muddled responsibilities. But there are going to be large costs involved in reverting to political control of the NHS.

Such reorganisations of large bureaucracies cost money as some staff are made redundant and then simply rejoin a new organization doing similar jobs. Offices need to be closed and opened, staff relocated and new IT systems installed. In the short-term this change will cost many millions of pounds, not save it.

As a big user of the NHS I wonder how this will make my life better. I doubt it will. It’s surely a case of moving the deckchairs on the Titanic. Unless the management and culture are changed, nothing will be altered.

I spoke to my sister, Baroness Murphy, about this news and she was of the opinion that little would change. She used to chair an NHS Trust so has first-hand experience of the defects in the NHS bureaucracy. She happens to be in hospital at present – but not an NHS one of course.

There is more information on this change in a Guardian article here:  https://www.theguardian.com/society/2025/mar/13/why-has-nhs-england-been-abolished-and-what-does-it-mean-for-patients . It includes a link to an NHS England article that explains what it does.  

Fundsmith Equity Annual Meeting

Fundsmith recently held it’s Annual Meeting for shareholders. A recording is now available here: https://www.fundsmith.co.uk/tv/ . Fund manager Terry Smith is always worth listening to. Witty and informative at the same time.

As a holder of the Fundsmith Equity Fund I am happy to stick with it during the recent under-performance against the World MCSI index. The market is very distorted at present by the over-concentration on large tech stocks.

Terry quotes John Bogle about the distortions created by the increasing dominance of index funds. I am happy to stand back from this ill-informed popularity.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Aberdeen – Basic Branding Mistakes Repeated

Highlighted in a lead article in the FT today is the failure of what used to be named Standard Life Aberdeen to get their branding right. They report that several advisors told the company not to use the proposed name of Abrdn which has been widely ridiculed. The company has now decided to use simply “Aberdeen”.

Now I have some knowledge of this subject and the latest choice is no better. Aberdeen is the name of a city and hence not easily protectable as a registered trademark. The web address http://www.aberdeen.com is also already in use by someone else.

They should have started from scratch with a new and easily protectable name. Better late than never is the motto here.

Aviva is a good example of a wise and successful name change from CGNU, Commercial Union and Norwich Union. It can be done even if it takes some time for customers to get used to a new name. But trying to use a name like Aberdeen just shows that whoever made that decision does not understand the basics of sound branding.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Attending AGMs and World Kidney Day

There is a very good article on the benefits of attending Annual General Meetings of companies in the Investors Chronicle – see https://www.investorschronicle.co.uk/content/fd80e2d6-d2b2-4f56-a0ee-8be30d818d99 . I always try to attend them although being now less mobile I can only do so if companies provide for on-line attendance (via a “hybrid” meeting).

It is preferable if you can attend in person as you can learn more that way. Even if you are in a nominee account you should be able to obtain a letter authorizing attendance.

I wrote an article for ShareSoc when I was Chairman that spells out how General Meetings should be run. It still makes for good reading – see https://www.sharesoc.org/How_To_Run_General_Meetings.pdf . It is not just guidance for company directors but also worth reading for shareholders planning to attend such meetings.

This is what I said in my book “Business Perspective Investing” on attending AGMs at investment trusts:

AGMs – Are They Well Run? Good investment trusts have well attended Annual General Meetings with an informative presentation from the fund manager. Few open-ended funds have meetings for investors but Fundsmith Equity Fund is one commendable exception. How the Chairman handles the meeting, and their willingness to answer extended questions can also provide an indication of their competence”. I also said on general companies: “A good indication of how much attention a board of directors takes to the interests of minority shareholders is the conduct of the Annual General Meeting” and “As with politicians, some company directors are experts in avoiding responding to straight questions with simple answers. Investing in companies where the CEO or Chairman is of that ilk should be avoided”. See page 71 of the book.

This is what is said in the IC article: “Those who already see the value of going to AGMs like to hear what the directors have to say, especially about strategy and the future. They can also share views about the company with other investors, and maybe have a quiet word with a director or two. No secrets will be spilled, but sometimes those casual chats can give unexpected insights into the business. Body language can speak louder than words”. I very much agree with those comments.

World Kidney Day

I was reminded via an email that today is World Kidney Day. This is aimed at promoting awareness of kidney disease (many people are not aware they have it when early treatment is preferable). See https://www.worldkidneyday.co.uk/ for more information. It gives a list of possible symptoms and a simple blood test or urine dipstick test can confirm if your kidneys are functioning well or not.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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When Your Internet Goes Down

This morning I learned how dependent we are now on the Internet. My hub (router) power plug loosened so it lost power. So I was out of action for about 12 hours. Blood pressure rose in response until I identified the problem.

You might say, was that not easy to identify? No it was not as I have multiple BT boxes on my desk and I thought my gardener might have cut through the cable when planting a new rose yesterday. It’s now taken a few hours to catch up with my emails (I can pick them up on my phone but it’s tedious to do so, particularly if I need to reply).

BT support was quite bad – expecting me to log into a support service on the web. What do people do if they don’t have access by other means if their main internet connection fails? It seems impossible to speak to someone.

I think it might be time for me to fire BT and switch to another internet provider. Please advise any recommendations.

The moral is make sure you have a back-up system for accessing the internet.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

You can obtain notifications of new posts in future by following me on Twitter (now “X”) – see https://x.com/RogerWLawson where new blog posts are usually mentioned.