A trade war involves a series of tariffs and countermeasures between countries. It can disrupt global supply chains, fuel inflation, and cause investment uncertainty.
President Trump’s goal is to close the gap between the value of goods the US buys from foreign sources and those it sells. He argues that American companies have been taken advantage of by “cheaters” and “pillagers.” He wants to force China to change its trade policies, especially in intellectual property protection.
If tariffs continue to rise, it will be harder for businesses to invest and consumer demand for goods could weaken. This would put a damper on economic growth and jobs in the US, and in other economies that depend on trade with both sides.
Some companies will shift production to other markets to reduce their exposure to tariffs. This may disrupt global supply chains and lead to job losses. Investors should keep a close eye on logistics, infrastructure and industrial real estate to see how these changes unfold. Trade friction also often spills over into broader geopolitical tensions, potentially destabilizing global cooperation on unrelated issues, such as climate change, cybersecurity and defence pacts. That’s why it’s important for both parties to separate trade problems from national security issues. The latter could undermine progress on the former, which is essential to resolving this crisis. We believe it is possible to do this, but only if both sides demonstrate restraint and flexibility. Further escalation of tariffs should be suspended during negotiations.