Jon Najarian
History Shows Trade Wars Have Smaller And Smaller Impact
There have been trade wars throughout history. The most recent, the one underway today with our President Trump going against several nations, has garnered a multitude of headlines and a fair amount of what I’ll refer to as Chicken Little the sky is falling warnings. However, I will cite both the work by Jeff Desjardins […]
There have been trade wars throughout history. The most recent, the one underway today with our President Trump going against several nations, has garnered a multitude of headlines and a fair amount of what I’ll refer to as Chicken Little the sky is falling warnings. However, I will cite both the work by Jeff Desjardins in the first graphic, as well as a chart of the S&P 500 versus the Chinese stock index to show that this is far more about fear-mongering than about actual negative economic impact.
Our own Boston Tea Party was a trade war. So were the opium wars in the 1830s. Both led to armed conflicts, but as Mr Desjardins’ chart demonstrates, the modern day impact of trade disputes has had much less of an impact.
As the chart below shows, over the past 3 months our S&P 500 (SPY) is up over 1%, while the Chinese market as measured by FXI is down 11.5%.
