North America is now engaged in a full-blown trade war. Markets are reacting. Japan’s Nikkei was the first to indicate the downturn, falling 2.9 per cent this morning, while early trading on the FTSE is down 1.1 per cent. It’s not the cataclysmic shock some were expecting, though also not the ‘FANTASTIC’ response the President insists has occurred since his announcements over the weekend, which include hitting Canada and Mexico with a 25 per cent import tariff, and China with an additional 10 per cent.
It is also just the start of market reaction, as forecasters pile in with predictions about what these tariffs mean for inflation, business confidence and future trade relationships between close allies. Wall Street has yet to open, but futures suggest a volatile day ahead in the United States, with Nasdaq 100 futures down 1.7 per cent and Dow Jones futures down 1.3 per cent.
Meanwhile, Goldman Sachs economists warn that stocks will continue to tumble.
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