Should investors be concerned about global trade tensions?

Markets have reacted with increased volatility

The recent escalation in trade tensions between the US and China marks a return of President Donald Trump's protectionist agenda.

Markets have reacted with increased volatility, as equities have swung from optimism to pessimism and back again. But should investors be concerned? First, we need to understand the rationale behind the proposed measures. In the days after the announcement of the first wave of tariffs on steel and aluminium, we got a clear indication. The announcements have been an act of brinksmanship, with countries one by one subsequently securing ‘exemption'. The quid pro quo for South Korea was to grant US car manufacturers better access to the Korean market and an agreement to limit its steel...