Unfortunately this headline is not intended to suggest that things are getting better, but rather that Donald Trump’s trade war is heating up. In a way I feel reminded of the Cold War between the US and the USSR in my youth, when the odd skirmish or shot down spy plane reminded the world that things could get a lot worse.
The past week demonstrated as much in the trade war. The US indicated that China tech giant Huawei’s mobile phones would be pretty useless without US software. China riposted straight away by reminding the US that their global technology leaders would be thrown into a similar existential crisis if China stopped access to their rare earths deposits, without which mobiles, computers and advanced batteries are hard, if not impossible to build (China is home to 90% of currently accessible deposit of rare earths).
A timely reminder that trade wars have no winners (and are hard, not easy to fight…!) and yet stock markets still only wobbled a little, but in no way were willing to price in the fact that this dispute could leave a considerable dent in corporate earnings, particularly those of the recent stock marked darlings in the US tech sector.
