Trump’s Whirling Dervish Ways Contrast China’s Softening Approach

Since President Trump's inauguration, the flurry of executive actions and foreign policy initiatives is nothing short of spectacular. When asked by the Wall Street Journal about the President’s first few weeks in office, David Axelrod, the former adviser to President Obama perhaps summed it up best: “I think he will get credit in the short term for being a whirling dervish of activity,” he said referring to a wild, erratic religious dance ritual popularized by Muslim Sufis. “The question is, what does that activity produce?”

As stock pickers, we typically eschew commenting on macroeconomics or geopolitics. Since at least the 2008 financial crisis, the investment landscape has changed, and we need to adapt our process even if at the margins. Most of us were forced to consider actions by central banks or government-directed economic policies or geopolitical convulsions. There are pivotal moments when these factors (rather than specific stock attributes) influence and even alter investing landscapes.

This month is when a quote from the Russian theorist, Vladimir Lenin, feels apt: “There are decades where nothing happens; and there are weeks where decades happen. ”

It sure feels that way today. Kicking off his second term and citing unfair economic burdens, Trump immediately withdrew the US from the Paris Accords, an international treaty formed to address climate change, and issued executive actions to accelerate oil drilling and reverse many of the DEI initiatives of the Biden era. Collectively, these actions signal that Trump may very well push ESG principles to the wayside. Free trade and globalisation will likely be fettered by tariffs and transactional diplomacy is the new game in town.

Last week in Europe, speeches by Vice President J D Vance and Defense Secretary Pete Hegseth have rudely shaken European contentment. President Trump has initiated dialogue with Russia about potentially ending the war in Ukraine, leaving the Europeans as bystanders. It’s possible that Europe will be weaned away from US security guarantees.

Trump discussed inviting Russia back into the G-8. With Trump floating the potential of economic deals there, Russia might become investible again. Two of the country’s largest trading partners, Canada and Mexico, have been placed on a similar pedestal as the US’s long-perceived arch enemy, China.

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