Research

Markets No Longer See Import Tariffs as a Major Obstacle – But Is That Justified? Virtually every economist agrees that a trade war triggered by import tariffs produces no winners, only losers. It was therefore no surprise that markets reacted strongly and negatively when President Trump announced unexpectedly steep tariff increases. However, roughly six weeks have passed since then, and much has changed. When Trump saw stock prices falling sharply and his popularity decreasing, he backtracked. He first announced a 90-day pause, and later reached an agreement with China that included significant tariff reductions on both sides. Many observers viewed this as further proof of Trump’s negotiating style: start with an extreme position, then concede significant ground during talks. Additionally, recent U.S. economic data painted a mixed picture...