Financial Times: Global Stocks Tumble as Trade War Fears Intensify

Stock markets worldwide are in decline as trade threats between the United States and China escalate. The US economy is strong, and the Trump administration’s goal is to reduce the US trade deficit with China. Trump promised $200 billion more in tariffs if China does not drop its most recent retaliatory move. The administration tries to target China but the sell-off throughout Asia reflects a complex network of supply chains with parts of any product coming from multiple countries. Europe is just emerging from a long economic crisis and starting to see economic growth, but still manages pockets of debt. In this Financial Times article, analysts suggest that first round of tariffs was negligible for both the United States and China, but the spat could expand to other areas including foreign direct investment and China’s funding of US debt, adding to market volatility and uncertainty. If the trade quarrels last for long, both sides will find substitute suppliers and markets. – YaleGlobal