{"id":36120,"date":"2018-07-21T09:18:37","date_gmt":"2018-07-21T14:18:37","guid":{"rendered":"http:\/\/olduvai.ca\/?p=36120"},"modified":"2018-07-21T09:18:37","modified_gmt":"2018-07-21T14:18:37","slug":"ignore-tariffs-according-to-goldman-this-is-the-biggest-risk-from-a-global-trade-war","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=36120","title":{"rendered":"Ignore Tariffs, According To Goldman This Is The Biggest Risk From A Global Trade War"},"content":{"rendered":"
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Ignore Tariffs, According To Goldman This Is The Biggest Risk From A Global Trade War<\/a><\/span>\u00a0<\/span><\/h3>\n<\/div>\n
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One month ago, when previewing the potential fallout from an “all out” global trade war, which for simplicity’s sake many have equated with an across-the-board 10% tariff on all US imports and exports, we presented an analysis <\/a>from Barclays, according to which the hit to 2018 EPS for S&P 500 companies would be ~11% and, thus, “completely offset the positive fiscal stimulus from tax reform.”<\/p>\n

Furthermore, the impact on exporters which would be directly affected, would be 5%, while that on US companies that import finished goods or inputs would be higher, at roughly 6%. This, to Barclays, highlights the unintended consequences of imposing tariffs given the global nature of current supply chains.<\/p>\n

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Since then, trade tensions have only escalated at an alarming pace. In context, the US has already imposed tariffs on $79 billion of US imports and proposed tariffs on an additional $702 billion, with the combined $781 billion in targeted goods representing 27% of total US imports.<\/p>\n

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Reflecting this escalation in trade tensions, the Trade Policy Uncertainty Index recently notched its highest reading since 1994 around the time of NAFTA\u2019s inception.<\/p>\n

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Adding fuel to the fire, in recent days all out currency war has also broken out following a sharp devaluation in the Yuan, which has tumbled at an annualized pace of 30%, far faster than during the 2015 devaluation<\/a>…<\/p>\n

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… and eventually prompted Trump to also enter the fray, when he first complained about the Yuan “dropping like a rock” on a CNBC interview (coupled with some not so veiled <\/em>suggestions against the Fed rate hiking ambitions), followed by vows to impose more tariffs and complaints about “illegal currency manipulation”, which have resulted in a rollercoaster move in the Yuan and, inversely, the dollar, and prompted Goldman to write <\/a>that “trade war is evolving into currency war.”<\/p>\n

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\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Ignore Tariffs, According To Goldman This Is The Biggest Risk From A Global Trade War\u00a0 One month ago, when previewing the potential fallout from an “all out” global trade war, which for simplicity’s sake many have equated with an across-the-board 10% tariff on all US imports and exports, we presented an analysis from Barclays, according […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[130,19042,376,9937,805,827,862,4318],"class_list":["post-36120","post","type-post","status-publish","format-standard","hentry","category-economics","tag-china","tag-global-trade-war","tag-goldman-sachs","tag-tariffs","tag-trade","tag-united-states","tag-war","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/36120","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=36120"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/36120\/revisions"}],"predecessor-version":[{"id":36121,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/36120\/revisions\/36121"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=36120"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=36120"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=36120"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}