In the hope of picking up some cheap shares, I’ve moved a little bit of cash into my Stocks and Shares ISA. In common with many investors, ‘Liberation Day’ has resulted in my portfolio taking a bit of a battering. But I don’t think there’s any need to panic. I’ve seen many market pullbacks before.

A cautious approach

However, I don’t intend buying anything just yet. But soon, I’m sure a clearer picture will emerge. With any change in policy, there’s likely to be winners and losers. However, if the economists are right, and global economic growth weakens as a result of a trade war, everyone’s likely to be worse off. But that doesn’t necessarily mean there’s an absence of opportunities for those prepared to take a long-term view.

President Trump’s idea of ‘Making America Wealthy Again’ makes sense. But the fall in the US stock market suggests not everyone in his country agrees with his approach. Until this week, I thought his threat to impose tariffs was a bit of a negotiating ploy. Indeed, it could still be. But I think now’s a good time to plan for the worst and assume that import taxes are here to stay.

What I’m doing

That’s why I’ve topped up my ISA. And there’s one stock – BP (LSE:BP.) – that I’m keeping an eye on. That’s because it’s currently (4 April) close to its 52-week low. And with a “larger footprint in America than anywhere else in the world”, it’s better protected from tariffs than most. It’s also likely to benefit from the “drill, baby, drill” approach of the Trump administration.

However, its share price is closely correlated with the price of oil. This isn’t surprising given that approximately 65% of the group’s revenue is derived from oil-based products.

But world oil prices have been dropping as fears of a global trade war increase. Although an economic slowdown’s likely, businesses and consumers will still need oil and gas.

An increasing yield

Previously, I’ve said that BP’s dividend isn’t high enough to compensate me for the risk of investing in the energy sector. However,  the stock has fallen 25% since April 2024, and it’s now yielding 6.4%.

The recent slide in the dollar has reduced this slightly. If the January exchange rate was used, the yield would be 6.8%.

But I think there could be further trouble ahead. China has announced a retaliatory tariff on the US, which could be the start of a series of tit-for-tat measures unveiled by governments around the world. As a result, I suspect the oil price will come under more pressure. Brent crude is currently trading at its lowest level for three years.

My plan

Of course, timing the market is notoriously difficult. Although I’m confident that the BP share price will stop falling, I’ve no idea when this will be.

Although there’s a wide discrepancy in forecasts, most economists agree that the world hasn’t reached peak demand for oil. And even when it does, it seems unlikely to fall quickly thereafter. That’s why I think BP could be a bit of a bargain.

But I’m going to keep the energy giant’s shares on my watchlist for now as it looks to me as though the current market volatility will continue for a little while longer.