No model can capture it. No analyst can fully comprehend it. But it’s there and it’s not going away, at least not until the 2020 election. For good or ill, the Trump factor keeps on surprising, giving the President’s supporters reasons to cheer and opponents endless justifications to oppose his policies. The question is whether the escalating and now-widening battle on trade will benefit or impair the US economy in the near term and beyond? No one’s really sure at this point for the simple reason that Trump’s trade-related decisions are in flux and apparently evolving on a daily basis.
This news does leave the world wondering whether Trump’s use of tariffs could become ever broader. This is a step change as previously we had been seeing delays in trade-related decisions on Europe and Japan as we thought the administration was so focused on China. It does add to the reasons to worry that any country running a trade surplus with the US could come into the spotlight in the future.