Trade War Backfires: Independent

Global trade is tightly interconnected, so tariffs imposed by China and the United States “hit firms in their own countries almost as much as the ones they were aiming at,” reports Phil Thornton for the Independent. Researchers in Switzerland and China studied stock market responses to tariffs announced since 2018 and “found that while the trade war tariffs of the US and China directly hurt targeted firms and sectors abroad as intended, they indirectly affect stock prices through global value chain linkages in the US, China, and in third economies which do not directly participate in the trade war.” The researchers conclude that applying narrowly targeted tariffs against a single nation is no longer easy to do and amounts to a price increase. The Federal Reserve also found that US tariffs stalled manufacturing job growth and prompted the sector to contract five months in a row for 2018. – YaleGlobal