Global trade tensions are on the rise. And while much of the attention has centered on a series of retaliatory tariffs between the United States and China, trade disputes with European and North American allies also have strained traditionally friendly relationships.
Investors should avoid putting too much emphasis on the short-term noise of daily trade rhetoric, but the eventual outcome likely will have economic, investment and political implications across the globe. To provide guidance on a complicated and rapidly changing situation, Capital Group’s investment team selected six charts that highlight a key takeaway for the current state of global trade.
1. Concerns over a possible trade war with China have unsettled markets.
Markets were calm in 2017, but that changed early this year. With equity valuations near historic highs, external factors are having a greater influence in unsettling markets. And while regulatory scrutiny of tech companies and threats of higher inflation also have contributed to market jitters, the looming shadow of global trade has overshadowed most other issues.