Trade War 2.0?

Hey Superheroes,

The ASX 200 slipped below 8,000 points this week to hit its lowest point in six months. It shed over A$200 billion in the last three weeks alone as global uncertainty weighed on markets. Over in the U.S., Wall Street wobbled as Trump’s tariffs (more on that below) may lead to a long period of economic stagflation.

On the bright side, the AUD gained strength as Germany’s €500 billion infrastructure plan drove up demand for commodity-linked currencies. Broader market optimism was also supported by the U.S. delaying auto tariffs on Canada and Mexico, easing trade tensions – though uncertainties still linger.

Let’s dive into this week’s biggest stories.

Trump’s Tariffs Shake Markets

Trump’s latest move has put global markets on edge.

The U.S. President confirmed this week he was pushing forward with Canadian and Mexican import tariffs, imposing a 25% levy on goods crossing the border. Similarly, he added an additional 10% tariff on Chinese imports – bringing the initial 10% levy to 20%.

The tariff news sent Wall Street into the red, with automakers, industrials and consumer goods companies especially feeling the pressure. The Mexican peso and Canadian dollar both dropped as investors braced for economic fallout.

⚔️ What United States-Mexico-Canada Agreement?

In response, Canada announced retaliatory tariffs on US$30 billion worth of U.S. goods with plans to escalate that to US$155 billion worth in the next 21 days. 

Justin Trudeau, Canada’s prime minister also plans to file a dispute resolution at the World Trade Organisation (WTO) and through the United States-Mexico-Canada Agreement – yup, ironic that exists. 

Mexico is also preparing its own countermeasures, set to be revealed in the coming days.

🇨🇳 China isn’t backing down either

“China will respond in kind,” states China’s Foreign Ministry spokesperson as the country’s government immediately retaliated with its own 10-15% tariff on U.S. food and agricultural products like corn and beef. 

Beijing also imposed export restrictions on 25 U.S. firms, citing the same “national security concerns” argument Washington frequently uses against China.

Having previously been subject to trade restrictions during Trump’s first term, Chinese officials believe it’s now well equipped for a trade war.

⚙️ Supply chains in the spotlight

Trade wars are undoubtedly no fun, but some industries get hit harder than others.

Automakers, steel producers and consumer brands – all of which rely on North American trade routes – are expected to be some of the hardest hit. 

Companies like Ford, GM and Tesla could see rising costs, while Coca-Cola and Procter & Gamble could face potential supply chain disruptions.

🔮 What happens next?

So far markets haven’t hit panic mode just yet but if tensions rise we could see inflation pressures rise, and future corporate earnings take a hit.

For now, investors are watching closely to see if this trade war is set to escalate further.

The Star’s last gamble: A success

On the brink of collapse, The Star Entertainment Group (ASX: SGR) bet big on a financial rescue.

After months of uncertainty, a private Hong Kong investor group has stepped in with a bailout package to keep the struggling casino operator afloat.

In a deal signed this afternoon, The Star is set to sell half of its stake in its Queen’s Wharf casino in Brisbane in exchange for A$50 million, providing much-needed cash to stabilise operations. Unfortunately for The Star, this sale also means full control of the casino and resort will be transferred to its Hong Kong-based partners.

🚨 Regulators aren’t done yet

While this gives Star some breathing room, the company is still facing a potential A$300 million fine from AUSTRAC over anti-money laundering breaches. Its ability to keep its casino licences – already under scrutiny – remains uncertain.

On the other end however, The Star is also in talks with the NSW Government to secure approvals to sell off its Sydney events centre  worth another A$50 million.

📉 A long way from its glory days

Star’s financial woes have wiped out more than 80% of its market value over the past two years. 

The stock is currently suspended from trading, with administration still on the table if the bailout isn’t finalised soon.

For now, all eyes are on whether Star can pull off this high-stakes turnaround – or if the house will finally lose.

🔦  Some other things we’re shining the Spotlight on:

IT’S A VIDDING WAR: Bain Capital and CC Capital have raised their offers for Insignia Financial to A$5 per share, valuing the company at A$3.34 billion (US$2.11 billion). This represents an 8.7% premium over their previous bids. Insignia has opened its books to both firms for due diligence – analysts suggest the bidding could rise to A$5.20 per share.

KRISPY KREME’S SUGAR CRASH: Investors aren’t biting. Krispy Kreme stock plummeted to all-time lows after another earnings disappointment. Slowing same-store sales and rising costs are putting pressure on the company’s bottom line.​

RIO DIGS DEEPER: Mining giant Rio Tinto just gave the green light for a A$2.8 billion expansion in the Pilbara. With iron ore demand booming, Rio is making sure it stays ahead in the race to feed China’s appetite for steel.

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