Whether or not tariffs would even work as intended is debatable, yet even if we ignore those complexities, erecting tariffs would likely spark a trade war. The Chinese, among others, have already made it clear that they won't accept American tariffs without some kind of response. Any trade war would stoke fears and negative sentiments, and would certainly lead to a decline in markets. I'd expect any such decline to be quite massive. While this might sound like alarmist talk, markets appear to have already been roiled by some of Trump's comments.
On the campaign trail, Trump called for 45% tariffs on Chinese goods. In an opinion piece published in a Chinese government newspaper, a writer claimed that China would respond with a tit-for-tat approach. According to the author, China would cancel a recent order of Boeing airplanes and order Airbus instead. Apparently, soybean, maize, and other agricultural imports would… Read More …
