The prospect of higher tariffs and other unfriendly trade policies is bad news for everyone exposed.
By definition, tariffs raise costs, which is bad for inflation, productivity, economic activity, and corporate earnings. And what’s bad for corporate earnings is bad for the stock market.
Policies that facilitate global trade have enabled countries to focus on their strengths and trade with others that can produce certain goods and services more efficiently. It’s a basic economic concept called “comparative advantage,” and it explains why international trade is a win-win.
“U.S. companies have clearly benefited from globalization,” Societe Generale analysts wrote. “The S&P 500 (ex-Financials) has benefited on the cost front too, with its cost …