Here's why the ASX200 is expected to fall 1.5% at the open

The ASX200 (ASX:XJO) is expected to drop around 1.5% when it opens.

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The ASX200 (ASX: XJO) is expected to fall by around 1.5% when the share market opens this morning.

As you may be able to guess, it was US President Trump that has caused this latest volatility.

The negative reaction is because the US has announced immediate tariffs on Argentine and Brazilian steel & aluminium according to reporting by the Australian Financial Review.

A sizeable part of Mr Trump's voter base is in rural areas where agriculture is a key part of the regional economy. Mr Trump alleged that both Brazil and Argentina have been manipulating and devaluing their currencies so that their products are more attractively priced to US importers, which is hurting US farmers.

In order to combat this Mr Trump is putting tariffs on the two countries and also suggested that the US Federal Reserve should lower rates to help improve the US currency exchange rate.

Australian exports seem safe for now, so it's a good thing that Prime Minister Scott Morrison is on friendly terms with the US President.

But, global share market investors don't like uncertainty. Is the US going to start hitting other countries with tariffs? Could this cause the South American region to have a recession?

It certainly provides us ASX investors with an opportunity to buy shares at a bit of a discounted price. I've got my eyes on various good investments that are already invested in quality businesses which are about to become cheaper like WAM Global Limited (ASX: WGB), Magellan Global Trust (ASX: MGG) and Vanguard MSCI Index International Shares ETF (ASX: VGS).

Foolish takeaway

Unless a painful global recession is about to start, I think it makes sense to generally buy any dips in the share market because when there isn't any bad news for a while the share markets keep pushing higher and higher, so we need to take advantage of these short-term price opportunities.

Motley Fool contributor Tristan Harrison owns shares of MAGLOBTRST UNITS and WAMGLOBAL FPO. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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