WTF is Donald Trump doing?

The US and Malaysia stock market is currently crashing. 3 months into 2025 with Donald Trump and the world is chaotic AF, as expected from a crazy businessman like him.

The reason for the market crash is because of Trump’s aggressive tariff policy, causing concern on a possible recession caused by higher inflation.

US was the country that started the globalisation wave post-World War II, because the labour cost to manufacture anything in the US was too expensive. So labour-intensive manufacturing work was outsourced to Asian countries, starting from Hong Kong, Taiwan, Singapore, Malaysia, then only China and Vietnam.

As shown in the Smiling Curve for value chain above, high-margin R&D and Marketing work remain in the US. The focus on R&D and marketing resulted in the US being the strongest consumer economy. 

When you control the world with your consumer, you can either choose to “Sanction” or “Tariff” the country you dont like. This is to cut off / increase cost for a country to sell to the US, aka the biggest consumer economy in the world.

Trump is now targeting their neighbour countries (Mexico and Canada) and China, to whack tariff on them. Being a businessman, he see tariff as a tool to invite countries to the negotiation table, instead of a permanent tariff slap. That’s why he flip flop a lot with his tariff, today announce, tomorrow U-Turn, then the next day announce again.

Market is not happy about this uncertainty.

Uncertainty is good for long term investors like us, but first let’s try to understand what Trump is trying to achieve.

2 reasons why Donald Trump is going around picking fight with their trading partners now:

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