Hi everyone.

I hope this newsletter finds you in the finest of form.

It’s February 2025, and the festive season is a distant memory. The new year is in full swing, and what a year it’s already been.

“May you live in interesting times” is an English idiom often said to be a translation of an old Chinese curse. The irony lies in the notion of “interesting,” as it usually alludes to times typically marked by difficulty and turmoil.

And ‘interesting times’ is possibly an understatement regarding the new incumbent of the White House. Whatever your thoughts on the greatness of this development or otherwise, let’s agree that the ‘interesting times’ arrived very quickly and will continue for quite some time. Well, at least four years, but the repercussions could be around for much longer.

It’s early days, but we must consider what some of DT’s directives might mean for investors and UK SMEs. The US may be far from us, but its reach and, by extension, DT’s influence is practically unlimited. So, having a working knowledge of the issues is better than being blown around haplessly by the winds of fate.

So, baton down the hatches, everyone; we’re in for a wild ride.

That’s Tariffic!

Last week, Trump slapped hefty tariffs (taxes on imports) on Canada, Mexico, and China, claiming they’ll fix trade issues, reduce illegal immigration and protect American jobs. But this move could cause more harm than good. Here’s why:

Price Hikes

Companies usually pass the extra costs onto domestic and commercial consumers when the US imposes import tariffs. That means higher prices for stuff people buy every day. You can expect to pay more if your supply chain has US goods or you source from the States (whether you know it or not).

Economies Go Into Reverse 

Experts believe tariffs hurt economic growth. Businesses rely on buying and selling goods across borders, and when trade gets disrupted, jobs and those who depend on these countries for trade can be affected.

The Fight Back Begins 

DT’s move effectively pulls the trigger on a trade war. China is challenging the US move and implementing retaliatory measures. The risk is that these moves are a mere amuse-bouche to what could balloon into a full-blown trade war, making life difficult for businesses and consumers worldwide.

Wall Street’s Spooked 

The stock market doesn’t like uncertainty, and these tariffs make investors nervous. Economic disruptions tend to be contagious, so when businesses get hit with extra costs, supply chains creak, and trade slows down. Inevitably, global stocks dropped in response to DT’s announcement, which directly affects (your) retirement savings and investments.

All Bets Are Off 

Americans are divided on the tariffs; MAGA Republicans support them, while Democrats argue that they will hurt the economy. But here’s the rub: DT has the EU in his beady sights for his tariff mania. If Europe is next on the list, expect the chaos to escalate. Will plucky Blighty escape? Will the ‘special relationship’, our post-Brexit status or the fact we host Trump golf courses save us? Don’t count on it. Trump has already said import taxes will “definitely happen” with the EU. He also said the UK “is out of line” on trade with the US and“we’ll see what happens”.

Buckle Up!

Trump still thinks tariffs will help America despite delaying those planned for Mexico and Canada for what he perceived as concessions from Trudeau and Sheinbaum. 

Was this a climbdown or pain delayed? We’ll soon see. He campaigned that tariffs were“not going to be a cost to you; it’s a cost to another country”, so voters’ expectations will be high. 

This strategy has economists worldwide scratching their heads, as tariffs are typically reflexive on the country imposing them. Indeed, DT admitted that they could inflict ‘some pain’ on US consumers. If he presses on with the EU, everyone can expect higher prices, job losses, and topsy-turvy stock markets. As the Bank Of England MPC committee commented: “Tariffs and other trade barriers would likely have adverse effects on UK activity.” 

If you feel exposed to these ill winds (or want to explore if you are), call my team, and we’ll have a look-see.

Meme, Me

I’ve extensively discussed crypto markets and documented these ephemeral assets’ exhilarating highs and harrowing lows. But despite past negative comments about Crypto, DT seems to be on board now, and the associated markets had a field day. Flanked by a phalanx of tech bros, the potential for unrestrained Crypto markets has excited everyone (me included).

Maybe fans can look into their Crypto wallets with glee instead of choking back their tears.

Trump’s recent directives have reversed Biden’s strict stance on Crypto, embracing the industry. His administration now has crypto-friendly regulators, including an executive order promoting digital assets.

Crypto leaders now directly influence Washington, with key figures like David Sacks appointed to senior roles. Crypto legislation is becoming a government priority, with discussions on regulations, banking access, and a potential US federal Crypto stockpile.

But don’t get too excited; this is Crypto, after all, and even the honeyed words of the Trump administration can only go so far. Indeed, the tariff debacle shaved off billions from Crypto markets, telegraphing their ongoing fragility.. 

Risk Remains

Financial experts at Elliott Management remind us that Cryptocurrency is currently in a speculative bubble that will inevitably collapse. Investors are still effectively gamblers, with AI and stock speculation fuelling the frenzy. That all sounds depressingly familiar.

Bitcoin’s Price Surge & Market Impact

For now, the Crypto market is buoyant. Since Trump’s election, Bitcoin has surged by nearly 50%, briefly exceeding $100,000 before falling slightly back. It’s still at a high, though. Investors expect more favourable policies that could further boost digital assets. If you bought early, you might be opening the Champers!

Warm Words

It’s thought that Trump’s enormous 18-year-old son, Barron, influenced his father’s views on Crypto, helping him connect with younger voters. Add in cultural influencers like Snoop Dogg and warm words about Crypto from the financial mandarins who recently gathered in Davos, and the stage could be set for a new age of mainstream Crypto acceptance.

Crypto-Cashing In

No, not you; I mean the Trump dynasty. Donald’s embrace of Cryptocurrency extended to his launch of Trump and Melania Meme coins a few days before the inauguration. 

For those who don’t know, these coins usually gain value through hype, social media trends, celebrity (like the dubious ‘Huc Tuah girl‘), or simply becoming the POTUS and FLOTUS of the US. Alas, for investors, Meme coins have no particular utility or value. 

Still, it didn’t stop the US First family from making billions of dollars by fleecing those deluded enough to ignore that meme coins aren’t worth the paper they aren’t printed on.

The Jury’s Out

Maybe Crypto is ready to hit the mainstream? Perhaps it will become a credible financial product we can reliably invest in like any other stock. It may even herald the death of fiat currencies by the middle of the century as we pay for goods and services from our Crypto stash. Only time will tell. It could equally be driven back into the shadows with just a few off-the-cuff remarks from the current POTUS. And as for NFTs, well, let’s not go there.

Another Overused Adage

‘Keep calm and carry on.’ That’s all we can do. We should run our businesses as best we can while learning as much as possible about emerging risks.

While I don’t want to dedicate too many words to Mr Trump, it seems inevitable he’ll be living rent-free in the heads of business people for quite some time.

The Enso team is here to help you deal with issues as they arise. Together, we’ll find a way through the maze of a global economy that is flashing bright orange.

All the best

Adam