The escalating trade war with China poses a major threat to the U.S. stock market. Ross Mayfield, investment strategist at Baird, joined TheStreet to discuss why this conflict presents a significant risk to both Wall Street and the broader U.S. economy.
Transcript:
ROSS MAYFIELD: My biggest short term concern for the markets right now is that the escalation with China continues, and there’s not a viable path to an off ramp, even with the 90 day pause in, you know, reciprocal tariffs on a handful of other countries, the escalation with China pretty much overpowers any of that. Given how much of our trade is done with China, though it’s come down in recent years, it’s still a significant portion of our imports.
There are just a lot of linkages there that are really hard to unwind. And right now, the, you know, the 200 plus tariff on China makes doing business there almost impossible. So the biggest concern in the near term is that the escalation. There doesn’t have viable off ramps. And even if we cut deals with every other country that we slapped, reciprocal tariffs on China alone could be enough to knock several percentage points from here off the S&P 500 or the major indexes, and could be enough to cool the economy significantly as well.
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