“It is going to be a struggle for some industries,” Ayers adds. “As a nation, the United States will lose impact on the world economy because we will lose demand for our products from abroad. There has already been an impact on farmers and those industries that have a high emphasis on exports. It will push down share prices and growth projections.”
Maybe because they are so new, the tariffs have had little effect on the global economy, says Omar Aguilar, chief investment officer, equities, at Charles Schwab Investment Management. “The trade war has had zero impact on the global economy so far, even though the situation is very concerning because countries try to protect themselves,” he says.
Ed Perks, chief investment officer of Franklin Templeton Multi-Asset Solutions, also downplays the risk. “At this stage, the likelihood of a full-scale trade war appears at least partially contained as world leaders continue to seek productive solutions,” Perks says. “On the whole, Franklin Templeton does not see international trade coming to a standstill or the global economy toppling into recession in the near term.”
However, the zero-impact may not remain that way for long. “Two opposing forces seem to be at work in the U.S.: the economy and trade tensions,” says Jeffrey Sutton, managing director of the Consulting Group at Oppenheimer Asset Management in New York City. “The economy is humming along with good data, and inflation fears [have] abated for the time being. On the flip side is the threat of tariffs on imports and the resulting retaliatory measures that would impact U.S. exports, which could have a menacing impact on growth globally. So far, the equity market has been fairly resilient in the face of these ongoing trade tensions.”