What to Make of the “Trade War”
The investment markets have been starting to get jittery about the escalating tit-for-tat tariffs and threats of tariffs that some economists are calling “America vs. the World.” Most investors are probably wondering whether new taxes on items flowing into and out of the U.S. really is something to worry about.
It is on several fronts. First, and most specifically, certain economic sectors will be big losers in an escalating tariff battle. When President Trump imposed tariffs on steel and aluminum imports, solar panels and washing machines, China responded with an equal dollar amount of tariffs on certain agricultural products, including soybeans, meat, fish, milk and cream, various fruits and vegetables, alcohol, dog and cat foot and cotton—all of which directly impacted the economics of many midwestern farmers (who China obviously presumes to be Republican voters).