We last wrote on trade tensions in March, when the Trump administration announced its first 25% tariff on USD 50bn worth of Chinese goods as part of its Section 301 investigation into intellectual property. Back then we concluded that while miscalculation was a risk to the economy and markets, ultimately the incentives of Presidents Trump and Xi were sufficiently aligned to avoid a damaging ‘trade war,’ or imposition by both countries of across-the-board tariffs on imports. We make a similar conclusion in this Macro Monthly, except we acknowledge that the stakes have surely risen. President Trump’s initiation of a ... (full story)