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Here’s what you need to know today

• Another week leads off with headlines around President Trump’s tariffs. After the US Court of International Trade halted Trump’s ‘Liberation Day’ tariffs a US Appeals Court temporarily reinstated them while the Trump White House appeals the original decision. (NY Times)
  
  

• Meanwhile President Trump told a rally in Pennsylvania that he planned to increase tariffs on foreign steel imports from 25% to 50%, with the tariff increase to take effect from this Wednesday. (ABC)
  
  

• One of the big winners from Trump ratcheting up steel tariffs may be an Australian company. Bluescope Steel manufactures more than 3 million tonnes of steel each year in the US and those US operations generate about half the company’s profit. A 50% tariff on imported steel will make its US-made steel more attractive to US buyers. (AFR)
  
  

• President Trump also claimed China “totally violated its agreement” with the US to de-escalate tariffs as US Treasury Secretary Scott Bessent acknowledged trade talks have “stalled”. At this stage, neither country has suggested increasing tariffs before the 90 day window expires. (ABC)
  
  

• China and the US also found themselves at odds after US Defence Secretary Pete Hegseth said in a speech China’s threat to Taiwan “is real. And it could be imminent”. China hit back, claiming the US is “the biggest factor undermining peace and stability in the Asia-Pacific region” while warning the US not to “play with fire”. (AFR)
  
  

• To deal with the cost increases from tariffs, many global brands have said they plan to spread prices increases around the world rather than increase prices specifically for US customers. Birkenstock and Pandora are just two brands that have recently acknowledged this publicly. So even if Australia avoids further tariffs, we may not avoid tariff-induced price increases. (ABC)
  
  

• A tough end to the week for Australian lithium miners. Pilbara Minerals was down 6%, IGO down 5%, Liontown Resources down 3% and Mineral Resources down 2%. The falls came after UBS and Citi both released reports with a dim outlook for the lithium sector. (Capital Brief)
  
  

• Australian building approvals fell 5.7% in April, disappointing economists that had been predicting 3.1% growth. This is unwelcome news as Australia continues to drift further from its target of 1.2 million new dwellings built between 2024 and 2029. (Capital Brief)
  
  

• Taylor Swift has bought back the rights to her first six albums from private equity firm Shamrock Capital, for an undisclosed amount. After spending years re-recording her early albums as (Taylors Version), Swift now owns the rights to all of the original versions and (Taylors Version) as she celebrated in a post, "All of the music I've ever made now belongs to me." (ABC)

What the…?

It appears that Australians are rushing back into the property market. New data from credit reporting agency Equifax shows that mortgage pre-approvals were up 24% year-on-year in March.

Since then, we’ve had a second rate cut and with talk of more to come, we can only imagine those pre-approval numbers will continue to increase. The Australian obsession with property remains undefeated. (AFR)

Investing is a lifelong journey

Here’s what you can learn today.

Finding ‘winner-takes-all’ companies

This is an excerpt from our conversation with Tim Samway, former Chair of Hyperion Asset Management, on Equity Mates Investing podcast. (Apple | Spotify | YouTube)

Question: How do you identify companies that can be 'winner takes all' in their markets?

Finding businesses with very durable competitive advantages is key. One of the best competitive advantages we find is a very superior product where a company is spending a disproportionately larger amount than their competitors on keeping their product ahead of the rest of the market. They're reinvesting to maintain that superiority. Because of that superiority, they attract capital and intellectual capital. It enables them to stay one step ahead and gives them optionality - the ability to start other businesses. It's the Amazon effect.

Question: What risks do you watch for with dominant tech companies?

The biggest risk for all of them is that they take their eye off the ball in their current product and spend too much time improving future products. First mover advantages and network effects are really powerful, but you can lose them if competitors leapfrog your product or service. For example, Facebook and Instagram are super powerful platforms, but a focus on the metaverse and taking the eye off the ball has allowed TikTok to steal a billion users right under their nose.

Prefer to watch our conversation with Tim? All Equity Mates episodes are now available to watch on YouTube.

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