9th April 2018

Tit for tat on trade causes market tremors

There has been significant volatility this week, mainly caused by the on-again off-again relationship between China and the US. The White House publication of an extensive list of tariffs on a multitude of products sent markets down initially, before reassuring briefings from senior officials caused some recovery.

 

Things got worse when China responded with its own hit list, before calming things down by announcing that they remain open to talks on trade. At the time of writing the headlines are reading “China vows to fight to the very end” – here we go again.

Markets hate uncertainty, and unfortunately this has been the defining feature of the Trump presidency. With no one able to convey policy without risking being undermined by a stray tweet, we won’t know what trade restrictions to expect until they’ve already been imposed. This means we’re at the mercy of market analysts for their insights. As these are often hopeless, expect these wild market fluctuations to continue.

 

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