CNBC reports that President Trump’s escalating trade battles with China and Mexico have cost the United States stock market $5 trillion and counting in lost returns according to Deutsche Bank.
While stock price appreciation would have normally occurred at an annual rate of 12.5% as part of the economic recovery since 2009, the trade wars have prevented US equity returns from the stock market. This loss of returns amounts to $5 trillion in the past 17 months.
President Trump’s hiking of tariffs on $200 billion worth of Chinese products, China’s subsequent retaliation of tariffs on $60 billion worth of imports, and Trump’s imposition of a 5% tariff on all Mexican products has exacerbated the financial situation. The continuation of these trade wars could hold implications for American economic growth in the future.