Fear alone of Trump’s trade policies to impact markets: In February, US dollar fluctuated in response to tariff fears. This is irrespective of the final result of tariff threats as seen with resumed dollar strength as the US announced tariffs on China, Mexico and Canada.
A new trade war could be different from previous ones: It is worth noting that Trumps first trade war with China had minimal impact on US inflation however, a second trade war could differ as Canada and Mexico account for double the share of imports.
China’s avoidance of tariffs in the first trade war: A re-route of goods was experienced in February for China via other countries including Mexico. However, goods from Mexico and Canada travel via land resulting in possibly harder tariffs to circumvent.
Get the latest issue of FAnews