(Kitco News) - U.S. tariffs announced by U.S. President Donald Trump could push the world into a recession and create major complications for the global mining sector, according to Nicole Adshead-Bell, Director of Cupel Advisory.
Adshead-Bell warned that the sweeping 10% blanket tariff, with up to 54% on Chinese goods, risks a repeat of the trade policy missteps that worsened the Great Depression.
“In typical Trump fashion, he’s attacking the problem with a hammer versus some delicate negotiation,” Adshead-Bell told Kitco’s Senior Mining Editor and Anchor Paul Harris in the latest episode of Digging Deep. “You just see escalation upon escalation, and you’re making everything more expensive for everybody.”
Trump’s tariff announcement could have far-reaching economic consequences, with China quickly retaliating with a 34% tariff on U.S. goods. Adshead-Bell argued that such protectionist measures ignore the complexity of global supply chains and the interconnected nature of modern manufacturing and mining.
“You might have something that’s technically made in the States, for example, but is sourcing 80% of those components from elsewhere in the world,” she said. “Governments don’t really understand where their stuff comes from and how supply chains actually work.”
While Trump has pushed for more raw material production within U.S. borders, Adshead-Bell noted that mining is only one part of the puzzle. The U.S. and most Western nations lack the refining and smelting capacity needed to process materials.
“It’s not just more mines, it’s more smelters and refiners,” she said. “Unfortunately for the States and Canada and just about every country in the world except China, there’s very few that have material in-house capacity.”
Adshead-Bell credited Trump with raising public awareness about critical minerals, particularly rare earth elements, but added that the strategic disadvantage remains stark.
“China makes decisions for 50 years. Other governments, particularly democratic ones, are focused on the next election cycle,” she said.
Turning to gold markets, Adshead-Bell said the economic uncertainty generated by protectionism is bullish for precious metals. Analysts are raising their long-term gold price assumptions, and the sector is seeing growing interest in mergers and acquisitions.
“In times of uncertainty, gold is a safe haven asset,” she said. “You’re now seeing all those companies… are now happy to be a gold company again.”
Despite record gold prices, major gold miners continue to trade at a discount to bullion, according to a recent Scotiabank chart referenced in the interview. Adshead-Bell said generalist investors entering the space could drive the next leg higher.
On geopolitics, Adshead-Bell cautioned against overconfidence in risky jurisdictions. Barrick’s $72 billion Reko Diq project in Pakistan, for example, faces serious security concerns, including threats from the Balochistan Liberation Army.
“As a mining company, you’re kind of stuck in the middle of that, and that’s not a good place to be,” she said.
She also warned that Russia’s expanding military involvement in West Africa, particularly in countries like Mali and Burkina Faso, could jeopardize Western mining operations and accelerate the shift in global influence.
Elsewhere, she highlighted renewed capital market activity in the mining space, including large financings and early-stage M&A activity, as indicators of renewed investor appetite.
“I think it’s all very, very positive signals for equity performance going forward,” she said.
Still, for many junior developers, the challenge remains capital preservation and surviving a cycle in which they’re largely ignored by investors.
“If you’re not getting rewarded for spending money, maybe you shouldn’t be doing it,” Adshead-Bell said. “You have to convince the market you’re not going forward at all costs.”
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