Source: Cobden Center
by Luca Martina
“We don’t know whether the trade war triggered by President Donald Trump stems from his ignorance of the potential consequences, it is a poorly conceived strategy of ‘conquering’ global markets, or simply a botched attempt to impose his negotiation rules on other countries. Certainly, acts of commercial hostility are multiplying, and the possibility of a significant contraction in international trade (one of the greatest drivers of global growth) has become real. What about financial markets? Investors are typically averse to uncertain environments, as it complicates the process of valuing a company. Stock markets rely on predictions of future performance and it is hard to make informed guesses if you cannot predict future profits and at what interest rate future cash flows should be discounted (the value of a sum received must be brought to the present, discounted by an interest rate).” (04/22/25)