Trade Policy Uncertainty; Trump's Iran Options | Horizons Middle East & Africa 2/23/2026
Speakers
Summary
- Trade Policy Pivot: The US Supreme Court struck down President Trump's use of IEEPA for reciprocal tariffs. Trump has pivoted to a proposed 15% blanket global tariff. Markets are treating this as a "sell US / buy Asia" event, with US futures falling while China, India, and Brazil outperform.
- Geopolitical Volatility: The US is considering limited military strikes on Iran to force a nuclear deal, though diplomatic talks in Geneva are scheduled. Oil is currently trading lower (-1.3%) on hopes of diplomacy, but the risk premium remains high.
- Commodities Divergence: A clear bifurcation is emerging in metals. Gold, Silver, and Copper are favored due to uncertainty and AI/Data Center demand, while Iron Ore and Lithium are facing bearish headwinds from supply responses and weak Chinese steel demand.
- Middle East Capital Flow: Brookfield highlights a massive shift in the GCC from oil-dependence to a diversified economy, specifically citing a $100B opportunity in AI compute and data center infrastructure.
Trade Ideas
Gold and Silver are advancing on trade policy uncertainty. Copper pullbacks are viewed as limited due to "scarcity of resources" and data center demand. The macro environment (policy chaos) supports safe havens (Gold/Silver). Simultaneously, the structural build-out of AI infrastructure (Data Centers) provides a physical floor for Copper demand, regardless of the trade noise. Long Precious Metals and Copper. A sudden resolution to trade tensions or a stronger USD could depress metal prices.
Morgan Stanley is cautious on Iron Ore due to expected falls in Chinese output. For Lithium, they see prices having "overshot" and note a significant supply response (producers restarting). Unlike Copper (scarcity), Lithium is suffering from a "supply response" where higher prices immediately trigger more production, capping upside. Iron Ore lacks the AI/Data Center secular tailwind. Avoid or Short Iron Ore and Lithium exposure. Unexpected stimulus from China targeting heavy infrastructure could spike Iron Ore.
Laura Davison
Washington Bureau Chief
The Supreme Court ruled Trump's "reciprocal tariffs" unconstitutional. Trump is now proposing a flat 15% global tariff. While a 15% tariff is negative, the removal of the "reciprocal" threat (which could have been much higher for specific nations) is being priced as relief for major emerging markets. Bloomberg Economics explicitly names China, India, and Brazil as beneficiaries of this shift relative to the US. Long Emerging Markets (China/India/Brazil) against US equities in the short term as the market reprices the tariff regime. Trump could find alternative legal avenues to impose harsher specific tariffs, or the 15% blanket tariff could trigger a global recession.
Mahjabeen Zaman
Head of FX Research, ANZ
Japan faces fiscal uncertainty and recent inflation data shows disinflationary momentum. ANZ expects only one rate hike or less. The "fiscal risk premium" is being attached to the Yen. Without aggressive rate hikes to support the currency, and with the government struggling to fund tax cuts, the path of least resistance for the Yen is lower (USDJPY higher). Short JPY (or Long USDJPY). A massive risk-off event (war in Iran) could trigger safe-haven flows back into the Yen despite fundamentals.
Brookfield is seeing "exceptional tailwinds" in the GCC (Gulf Cooperation Council), specifically citing low vacancy rates in real estate and a $100B opportunity in AI compute/data centers. The region is undergoing a structural shift where sovereign wealth is partnering with private capital (Brookfield) to build domestic infrastructure. This is guaranteed, contract-backed CAPEX, not speculative growth. Long Brookfield entities as a play on Middle East infrastructure and AI build-out. Geopolitical escalation involving Iran could freeze capital deployment in the region.
Up Next
This Bloomberg Markets video, published February 23, 2026, features Amy Gower, Laura Davison, Mahjabeen Zaman, Jed (Brookfield) discussing GLD, COPPER, SILVER, LITHIUM, MCHI, INDA, EWZ, JPY, BN, BAM. 5 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Amy Gower, Laura Davison, Mahjabeen Zaman, Jed (Brookfield) · Tickers: GLD, COPPER, SILVER, LITHIUM, MCHI, INDA, EWZ, JPY, BN, BAM