Mining Forum Americas: Taiwan war could reshape metals – fast

Colorado Springs, Colo. – The “Trumponomics” playbook – 10% base tariffs, a weak-dollar tilt and rising great-power risk – points to more gold upside and a messy reroute of mining supply chains, historian Sir Niall Ferguson says.

One offshoot could be China sensing a weak America, allowing it to strike Taiwan, which would slam the copper- and nickel-intensive electronics and electric vehicles markets that depend on the island’s computer chips, the Oxford-educated academic said. He gave a keynote presentation at the Mining Forum Americas conference in Colorado. 

The U.S. lacks the inventory for a long military fight and the time it would take to build U.S. plants to replace Taiwan’s outsize role in technology concentrates risk, the author of books such as Doom: The Politics of Catastrophe said last week.

“If there were a war over Taiwan, it would have an equivalent economic effect to the 1973 [Israeli] war,” Ferguson said. “It would be silicon, not oil, that would become the problem for the entire global economy.”

For miners, the effect is two-stage – brace for a sharp demand air-pocket and risk-off trend, then position for a fiscal pull into North American copper, nickel sulphide and rare earths as governments scramble to harden supply. Don’t over-index to week-one carnage – capex incentives can arrive quickly once policymakers absorb the shock, Ferguson suggested.

Risk tolerance

Public tolerance for risk matters to timelines and valuations. Americans are more supportive of military action than many assume in a Taiwan blockade scenario, Ferguson noted. But the politics are “narrow and noisy,” implying prolonged uncertainty and whipsaw price signals rather than a clean scenario that can be modelled.

Ferguson’s macro read points towards a cheaper dollar.

“The most likely trajectory for the U.S. dollar, unless there’s radical fiscal reform, is downwards,” he said, linking currency weakness to Washington’s debt math and the administration’s policy mix.

A softer greenback typically supports U.S.-dollar-priced commodities and mine cash flows, particularly for non-U.S. producers. But the flip side is imported cost inflation – diesel, ammonium nitrate, grinding media and reagents – eroding part of miners’ expected margin uplift.

While a weaker dollar and higher tariffs help North American suppliers, import-reliant developers and traders face margin compression and lumpier working capital as dwell times lengthen at the border. The base tariff plus reciprocal rates are already incentivizing the re-routing of China-adjacent goods through third countries, Ferguson said.

“What I can predict with very high confidence is that this network will very rapidly readjust to the new trade barriers of U.S. policy, so that the revenues from tariffs will likely diminish as Chinese goods find new ways to get to the U.S. through third and fourth intermediaries.”

For operators using imported mills, crushers, tires, explosives, solar gear and EV-plant parts, this means extra paperwork. There will be more spot checks and unexpected delays. These can disrupt engineering-procurement-construction penalty assumptions.

USMCA

United States-Mexico-Canada Agreement friction is the second-order risk as more flows re-route via North America. Procurement teams should build dual-source or domestic options into 2025–26 budgets and lock in shipping windows where possible to buffer inspection delays.

Ferguson connects fiscal strain to gold demand.

“If a great power consistently spent more on debt interest than on defence, then it wouldn’t be great for very much longer.”

That inversion has put pressure on reserve currencies. Central banks are already diversifying by buying more gold than ever. Add a policy preference for a cheaper dollar and the case strengthens for producers and royalty/streaming names.

The investor takeaway is not to chase every stock market jump but to keep all-in sustaining costs low, balance sheets clean and financing windows disciplined. Developers with thoughtful capital spending plans and tight dilution can still find sponsorship in this environment, Ferguson said.

Payments divergence

Sanctions and tariff frictions are nudging counterparties onto alternative payment rails, Ferguson noted.

In China, some payments are now settled in renminbi. They use China’s Cross-Border Interbank Payment System rather than (global financial messaging network) SWIFT. While still marginal to SWIFT in volume, this shift is meaningful at the deal table, the author said. Expect more multi-currency offtakes and prepays, and greater use of bullion as neutral collateral to bridge counterparties on different payment systems.

China’s moves to thwart U.S. trade ties with Taiwan and counter American economic dominance – itself declining because of budget deficits equalling 6% of gross domestic product – portend another 1970s-style crisis like the OPEC embargo. A mining industry that needs Taiwan’s manufacturing demand while basking in gold’s safe-haven attraction shows a paradox, Ferguson said.

“Most people would consider that [crisis] scenario with dread,” he said. “It’s kind of strange to be in a room full of people who might actually think it was a massive home run.”