A Battle Over Trade Crashes the Bull Market’s Birthday Party
Now, however, with the resignation of Gary D. Cohn, the president’s top economic adviser, who opposed Mr. Trump’s shift on trade, it is clear
that Mr. Trump “is focused on changing trade relations as a means of reducing trade deficits and incentivizing U. S.-based production,” Mr. Pirondini said.
It’s not that the specific actions taken by President Trump — tariffs of 25 percent on steel and 10 percent on aluminum — will wreak global havoc.
A bear market, in Mr. Rosenberg’s view, would be associated with a “pernicious
and protracted decline.” Because the economy is reasonably strong — and stimulus from the recent tax cut has not had its full effect — stocks could rebound quickly, he said
Mr. Pirondini said he did not expect that the president would actually embrace a full-scale trade war
— which he defined as a contraction in global trade that exceeds any associated economic contraction.
Many global companies will suffer, he said, adding
that Mr. Trump’s policy is likely to be accompanied by “increasing inflationary pressures and margin pressure for corporations, and more volatility for equities.”
In an interview, he added that Mr. Trump was using “theatrical” methods to improve his negotiating position.
But he said Mr. Trump’s policy tilt might ignite a series of conflicts with America’s trade partners, to say nothing of the Asian giant
that appears to be the real focus of Mr. Trump’s ire: China.
