Trade… war! What is it good for?

At the end of April it might have seemed as though the bull market on the global stock exchanges was going to keep going indefinitely. The indexes across the ocean were hitting historical highs despite the continuing tensions between China and the US. The performances of the European stock exchanges were hardly giving grounds for concern either, even though the data for the EU economies was less than encouraging. Only the trading floors in Asia were seeing falls big enough to disturb the moods in the emerging markets. But the actual shock to the system came later in the month. Unexpectedly, the trade war between the US and China worsened instead of weakening. Donald Trump increased tariffs on selected Chinese goods to as much as even 25 pct, prompting a sharp sell-off on the American stock exchanges. The emerging markets, for which this May will probably be the worst in seven years, also reacted adversely. The Chinese economy might lose up to 1 percentage point of its GDP growth, which