Via Moody’s:
Financial markets believe that the U.S. is likely to fare better than most other major economies in an allout trade war. This is because (i) international trade accounts for a smaller share of U.S. business activity, (ii) the U.S. imports far more than it exports, and (iii) the U.S. now well outperforms other major economies. Nevertheless, though the U.S. is better able the withstand the direct and collateral damage of a trade conflict, it is still expected suffer casualties in a trade war. And such casualties might well influence the outcome of November’s Congressional elections.
The current episode of trade-related tensions emerged following the U.S. markets’ close of June 14, 2018. As of the early afternoon of July 12, the market value of U.S. common stock (also known as the Wilshire Index) defied the expectations of many, having exceeded June 14’s close by 0.5%. In addition, the broadest readily available valuation of U.S. common equities topped its year-end 2017 mark by 5.3%.
